(navigation image)
Home American Libraries | Canadian Libraries | Universal Library | Community Texts | Project Gutenberg | Children's Library | Biodiversity Heritage Library | Additional Collections
Search: Advanced Search
Anonymous User (login or join us)
Upload
See other formats

Full text of "United States Court of Appeals For the Ninth Circuit"

Form No. 7 



San Francisco 

Law Library 

No..222m 



EXTRACT FROM BY-LAWS 

Section 9. No book shall, at any time, be taken from the 
Library Room to any other place than to some court room of a Court 
of Record, State or Federal, in the City of San Francisco, or to 
the Chambers of a Judge of such Court of Record, and then only 
upon the accountable receipt of some person entitled to the use 
of the Library. Every such book so taken from the Library, shall 
be returned on the same day, and in default of such return the 
party taking the same shall be suspended from all use and pri- 
vileges of the Library until the return of the book or full 
compensation is made therefor to the satisfaction of the Trustees. 

Sec. 11. No books shall have the leaves folded down, or be 
marked, dog-eared, or otherwise soiled, defaced or injured. Any 
party violating this provision, shall be liable to pay a sum not 
exceeding the value of the book, or to replace the volume by a 
new one, at the discretion of the Trustees or Executive Committee, 
and shall be liable to be suspended from all use of the Library till 
any order of the Trustees or Executive Committee in the premises 
shall be fully complied with to the satisfaction of such Trustees 
or Executive Committee. 



Digitized by the Internet Arciiive 

in, 2010 with funding from 

Public.Resource.org and Law.Gov 



http://www.archive.org/details/govuscourtsca9briefs1850 



7457 



NO. 

IN THE /O 3 O 

United States Circuit Court of Appeals 

Fo^^e Ninth Circuit / 
-<^ — 



UNITED STATES OP^l»IERICA, 




vs. 



PARK LUSK, G 



<k 



Appellant, 



Appellee. 



•^ 



TRANSCRIPT OF THE RKftRD 




% 



Upon Appeal from the District Court of the United 
States, for the District of Idaho, Eastern Division. 

FILED 

APR9-m A 

PAUL P. O'BRIEN, 
olerk 



IN THE 



United States Circuit Court of Appeals 

For the Ninth Circuit 



UNITED STATES OF AMERICA, 

Appellant, 
vs. 

PARK LUSK, 

Appellee. 



TRANSCRIPT OF THE RECORD 



Upon Appeal from the District Court of the United 
States, for the District of Idaho, Eastern Division. 



NAMES AND ADDRESSES OF ATTORNEYS 
OF RECORD 

J. A. CARVER, 

U. S. District Attorney. 

E. H. CASTERLIN, 

FRANK GRIFFIN, 

Assistant U. S. District Attorneys. 

R. L. SLAUGHTER, 

Attorney for the Department of Justice. 
Boise, Idaho, 

Attorneys for Appellant. 
B. W. OPPENHEIM, 

J. H. LAMPERT, 

J. B. MUSSER, 
Boise, Idaho, 

Attorneys for Appellee. 



INDEX 

Page 

Acknowledgment of Service of Appeal Papers 252 

Acknowledgment of Service of Bill of Exceptions 211 

Answer 16 

Assignment of Errors 216 

Bill of Exceptions 34 

Certificate of Clerk 253 

Certificate of Judge to Bill of Exceptions 213 

Citation on Appeal 248 

Complaint 9 

Demurrer 14 

Instructions to the Jury 199 

Judgment 29 

Minutes of October 17, 1933 : 23 

Minutes of October 18, 1933 25 

Minutes of October 19, 1933 25 

Minutes of October 20, 1933 27 

Minutes of December 27, 1933 28 

Motion for New Trial 19 

Order Allowing Appeal 248 

Order Denying Motion for New Trial 22 



INDEX- - - ( C ONTINUED ) 

Page 

Order Extending Time for Bill of Exceptions 32 

Order Extending Time for Bill of Exceptions 33 

Order Extending Time for Bill of Exceptions 34 

Order Overruling Demurrer 15 

Petition for Appeal 214 

Praecipe for Transcript of Record 250 

Stipulation for Settlement of Bill of Exceptions 211 

Verdict 29 



INDEX TO BILL OF EXCEPTIONS 

Page 
Witnesses on Behalf of Plaintiff: 

Direct Cross Redirect Recross 

Bishoff , John Richard 36 38 39 

Butler, J. E 47 49 

England, Ed 106 106 

Groom, Dr. C. P 149 157 196 197 

Humphry, H. W 44 46 

Kackley, Dr. Ellis 107 136 

Leishman, N. H 40 41 

Lewis, Hyrum 51 

Lusk, David 58 64 66 

Lusk, Mrs. Dave 53 55 

Lusk, Park 73 91 105 106 

Lusk, Mrs. Park 66 70 , 73 

Noble, Archie N 56 57 

Williams, J. N 42 44 

Witnesses on Behalf of Defendant : 

Bistline, Claude 168 

Cameron, Clark 166 

Forrest, Dewey 164 

Germon, Dr. P. J 181 190 195 195 

Meffan, George A 164 

McReynolds, W. D 164 

Riggs, Dr. G. E 176 

Sprague, Dr. Charles H. 170 
Tallon, M. V 167 



169 


170 


167 


167 


165 


166 


190 


195 


179 


180 


173 


176 


168 





IN THE DISTRICT COURT OF THE UNITED 

STATES FOR THE DISTRICT OF IDAHO, 

EASTERN DIVISION 



PARKLUSK, 

Plaintiff, 

vs. 

UNITED STATES OF AMERICA, 

Defendant. 



No. 837 

COMPLAINT 

Filed February 16, 1932 

Comes now the plaintiff in the above entitled action 

and complaining of the defendant alleges as follows, to 

wit: 

I. 

The plaintiff herein is now a resident and citizen of 
Crystal, County of Power, State of Idaho, which is with- 
in the Eastern Division of the United States District 
Court of Idaho. 

II. 

That on the 17th day of September, 1917, said plain- 
tiff enhsted for military service in the United States Ar- 
my and served as a member of said United States Army 
continuously thereafter until he was honorably discharg- 
ed from said United States Army on the 8th day of May, 
1919. 



10 United States of America vs. 

III. 

That while in the United States Army and during the 
period between his said enHstment and his said honora- 
ble discharge as mentioned in the preceding paragraph 
•of this complaint, desiring to be insured against the risks 
of war hazard, he applied for a policy of War Risk In- 
surance in the sum of Ten Thousand and no/100 ($10,- 
000.00) Dollars, and at the time of said application au- 
thorized the deduction from his service pay for all prem- 
iums that might become due for the said insurance, and 
said premiums were thereafter deducted from his said 
monthly service pay. 

IV. 

That a certificate of War Risk Insurance was duly 
issued by the defendant to this plaintiff and by the terms 
thereof this defendant agreed to pay to this plaintiff 
Fifty-seven and 50/100 ($57.50) Dollars per month in 
the event of this plaintiff's suffering total and permanent 
disability, and that premiums were paid on said contract 
in accordance with the authority given as set forth in 
Paragraph III hereof, until the 31st day of May, 1919. 
And that said contract of War Risk Insurance was duly 
issued and premiums were paid thereon and said contract 
was in full force and effect at the time of this plaintiff's 
discharge from the military service as aforesaid. 

V. 
That while this plaintiff was in the military service of 



Park Lusk 1 1 

the United States as aforesaid, and while said contract 
of insurance was in full force and effect, this plaintiff 
did contract 

General Neurosis from shell shock 

Gastro-Intestinal Poisoning from gas 

Chronic Bronchitis 

Chronic Laryngitis from gas poisoning 

Photophobia 

and that this plaintiff has continuously from the time said 
insurance was in full force and effect to the present date, 
suffered as a result of said 

General Neurosis from shell shock 

Gastro-Intestinal Poisoning from gas 

Chronic Bronchitis 

Chronic Laryngitis from gas poisoning 

Photophobia 
and that this plaintiff is informed and believes, and upon 
such information and belief, alleges the fact to be that as 
a result thereof the said plaintiff was at the time of his 
said discharge from said military service which was at 
a time that the said contract of insurance was in full force 
and effect, totally and permanently disabled, and has been 
so totally and permanently disabled from that time to the 
present date and that he will never be able to follow con- 
tinuously a substantially gainful occupation ; that by rea- 
son thereof he became entitled to receive from the de- 
fendant, the said sum of Fifty-seven and 50/100 



12 United States of America va. 

($57.50) Dollars per month from the date of his dis- 
charge from the United States Army, to wit: the 8th 
day of May, 1919. 

VI. 

That the plaintiff has made application in writing to 
the defendant through its Veterans Administration, its 
Veterans Bureau, and the Director thereof, for the pay- 
ment of said insurance benefits making his claim therefor 
on or about the 24th day of June, 1931. That the said 
defendant through said Veterans Administration and the 
Director of said Veterans Bureau has failed, neglected, 
and refused to pay to this plaintiff, said insurance or any 
part thereof, but claims and contends that the plaintiff 
has no right to the said payments or the payment thereof, 
and that on or about the 12th day of February, 1932, this 
plaintiff received from the Veterans Administration and 
the Director of said Veterans Bureau, notice that there 
exists a disagreement as contemplated within the provi- 
sions of Section 19 of the World War Veterans Act as 
amended July 3, 1930. And that there is now such a dis- 
agreement as required by Section 445 Title 38, U.S.C.A. 
and such a disagreement does now exist between this 
plaintiff and this defendant. 

VII. 

That this action is filed after July 3, 1931, but within 
the period of time thereafter less than the period elapsing 
between the filing in the said Bureau of the claim here 



Park Lusk 13 

sued upon and the denial of said claim by the aforemen- 
tioned Director and within the time as required by said 
World War Veterans Act. 

WHEREFORE, Plaintiff demands judgment against 
this defendant in the sum of Fifty-seven and 50/100 
($57.50) Dollars per month from the 8th day of May, 
1919, together with interest thereon and his costs and 
disbursements herein incurred, and attorneys fees as 
provided by law and as in the judgment of this court may 
be deemed just and reasonable, and that the court deter- 
mine what is a reasonable fee to be allowed to plaintiff's 
attorneys and direct the payment of said fees to plaintiff's 
attorneys. 

B. W. OPPENHEIM, 

J. M. LAMPERT, 

J. B. MUSSER, 

Attorneys for Plaintiff, 
Residence: Boise, Idaho. 

(Duly verified) 



14 United States of America vs. 

(Title of Court and Cause) 



DEMURRER 

Filed April 12, 1932. 

COMES NOW the defendant in the above entitled 
cause and demurs to plaintiff's Complaint on file herein, 
generally and specially, upon the following grounds, to- 
wit : 



That the allegations contained in plaintiff's Complaint 
do not set forth facts sufficient to constitute a cause of 
action against this defendant. 

II. 

That the Complaint of plaintiff is ambiguous, unintel- 
ligible, and uncertain, in this : That it cannot be ascer- 
tained from the allegations contained in Paragraph V. 
thereof the date that the plaintiff became afflicted with 
the diseases, disabilities, and injuries enumerated there- 
in, or the date that plaintiff became permanently and to- 
tally disabled, or what disease, disability, or injury enu- 



Park Lusk 15 

merated in said Paragraph V was permanently and to- 
tally disabling. 

H. E. RAY, 

United States Attorney for the 
District of Idaho, 

RALPH R. BRESHEARS, 

Assistant U. S. Attorney for the 
District of Idaho, 
Attorneys for the defendant. 



(Title of Court and Cause) 



COURT MINUTES OF JUNE 2, 1932 

The defendant's demurrer to the complaint was over- 
ruled by the Court and sixty days was granted in which 
to answer. 



16 United States of America vs. 

(Title of Court and Cause) 



ANSWER 

Filed January 11, 1933. 

COMES NOW the defendant in the above entitled 
action, and answering plaintiff's Complaint on file here- 
in, admits, denies, and alleges as follows : 

I. 

Answering Paragraph I of plaintiff's Complaint, this 
defendant denies each and every allegation contained 
therein. 

II. 

Answering Paragraph II of plaintiff's Complaint, this 
defendant denies each and every allegation contained 
therein; in this connection, however, it is admitted that 
the plaintiff enlisted for military service in the United 
States Army on or about September 18, 1917, and was 
honorably discharged therefrom on or about May 8, 1919. 

III. 

Answering Paragraph III of plaintiff's Complaint, 
this defendant admits the allegations contained therein. 

IV. 

Answering Paragraph IV of plaintiff's Complaint, 



Park Liisk 17 

this defendant denies each and every ellegation contained 
therein ; in this connection, however, it is admitted that a 
certificate of war risk insurance was duly issued by the 
defendant to the plaintiff by the terms whereof the de- 
fendant agreed to pay the plaintiff $57.50 per month in 
the event that he suffered total and permanent disability 
while said contract of insurance was in full force and ef- 
fect; it is further admitted that premiums on the policy 
were paid to include the month of May, 1919. 

V. 

Answering Paragraph V of plaintiff's Complaint, this 
defendant denies each and every allegation contained 
therein. 

VI. 

Answering Paragraph VI of plaintiff's Complaint, 
this defendant denies each and every allegation contained 
therein. 

VII. 

Answering Paragraph VII of plaintiff's Complaint, 
this defendant denies each and every allegation contained 
therein. 

FOR A FURTHER ANSWER TO PLAINTIFF'S 
COMPLAINT, AND BY WAY OF AN AFFIRMA- 
TIVE DEFENSE, THIS PLAINTIFF ALLEGES: 

I. 

That the plaintiff's cause of action, if any, is barred 



18 United States of America vs. 

by the provisions of Title 38, Section 445, U. S. C. A., 
as amended July 3, 1930, for the reason that plaintiff's 
Complaint was not filed within the time limit prescribed 
in said statute. 

II. 

That this court is without jurisdiction of the subject 
matter of plaintiff's Complaint for the reason that plain- 
tiff did not file his complaint within the time allowed by 
Section 445, Title 38, U. S. C. A., as amended July 3, 
1930. 

WHEREFORE, having fully answered plaintiff's 
Complaint, defendant prays that said Complaint be dis- 
missed, and that plaintiff take nothing thereby, and that 
defendant have judgment for its costs. 

H. E. RAY, 

United States Attorney for the 
District of Idaho, 

RALPH R. BRESHEARS, 

Assistant U. S. Attorney for the 
District of Idaho, 
Attorneys for the defendant. 

(Duly verified) 



Park Lusk 19 

(Title of Court and Cause) 



MOTION FOR NEW TRIAL 

Filed October 25, 1933. 

COMES NOW the defendant, the United States of 
America, and moves this court that the verdict of the jury 
and the judgment in the above case be set aside, and that 
the defendant be granted a new trial in the above-entitled 
cause, upon the grounds and for the following reasons : 



That the evidence is insufficient to justify or sustain 
the verdict of the jury, in this : That the evidence does 
not establish by a preponderance of the evidence that the 
plaintiff was totally and permanently disabled at the time 
and while the insurance contract was in force and effect ; 
that the evidence affi.rmatively shows that the plaintiff 
was continuously engaged in the occupation of farming 
from the time of his discharge from the army, during 
all the years to the present time, and that the evidence 
fails to show that the plaintiff did not receive a substan- 
tial and gainful remuneration and make a fair living for 
all the time so employed. 



20 United States of America vs. 

11. 

That the court erred in denying defendant's motion 
for a directed verdict at the close of the plaintiff's case, 
for the reason that the evidence of the plaintiff did not 
sustain the burden of proof required by law, in that the 
evidence failed to establish that the plaintiff was totally 
and permanently disabled during the existence of and 
while the contract of insurance was in full force and ef- 
fect, towit, prior to midnight of the 30th day of June, 
1919. 

III. 

That the Court erred in denying the motion of defend- 
ant for a directed verdict in its favor at the close of all 
the evidence, for the reason that there was no evidence 
in the record showing or proving that the plaintiff became 
totally and permanently disabled while his contract of in- 
surance was in full force and effect, and at a time prior 
to midnight of the 30th day of June, 1919. 

IV. 

That since the date of the trial, material and substan- 
tial evidence has been discovered which was not available 
to the defendant at the time of the trial and which could 
not have been discovered by due diligence prior to the 
date of the trial, and which would tend to disprove plain- 
tiff's claim of total and permanent disability while his 
contract of insurance was in full force and effect, and at 
a time prior to midnight of the 30th day of June, 1919. 



Park Lusk 21 

This motion is predicated and based upon all the tes- 
timony, both oral and documentary, the exhibits and all 
records and files in the case. 

It is the position of the defendant, first, that the plain- 
tiff failed wholly and entirely to sustain the burden of 
proof that is required of him as to his being totally and 
permanently disabled while the contract of insurance was 
in full force and effect, and at a time prior to midnight 
of the 30th day of June, 1919. There can be no question, 
based on the evidence, but that the plaintiff engaged con- 
tinuously since his discharge from the army on the 8th 
day of May, 1919, in the occupation of farming and road 
construction work. There is no evidence in this record 
that the plaintiff did not receive from this occupation of 
farming a gainful and substantial wage and a fair living. 
When the proof shows that he was engaged in the occupa- 
tion of farming over the period of years from the date 
of his discharge from the army, the 8th day of May, 
1919, to the present time, the plaintiff's case must fail, 
unless he goes a step farther and proves by a preponder- 
ance of the evidence that he did not receive a fair Hving 
from this occupation of farming. This he did not do. 

It is true that a very little proof was offered of dis- 
comfort, pain, and handicap, but this is not sufficient to 
sustain a finding of permanent and total disability, in 
view of the fact that there is positive evidence that the 
plaintiff by his own wilful acts contributed to such dis- 
comfort, pain, and handicap. 



22 United States of America vs. 

We respectfully submit that the defendant should be 
granted a new trial. 

Dated this 24th day of October, A. D., 1933. 
J. A. CARVER, 

United States Attorney for the 
District of Idaho, 
E. H. CASTERLIN, 

Assistant U. S. Attorney for the 
District of Idaho, 
R. L. SLAUGHTER, 

Attorney, U. S. Department of 
Justice, 
Attorneys for the defendant. 



(Title of Court and Cause) 



ORDER 
Filed January 9, 1934. 
The motion for new trial of the defendant having been 
presented, and after consideration of the same, 

IT IS ORDERED, That the same be, and it is denied. 
Dated this 9th day of January, 1934. 

CHARLES C CAVANAH, 

District Judge. 



Park Lusk 23 

(Title of Court and Cause) 



COURT MINUTES OF OCTOBER 17, 1933 

This cause came on for trial before the Court and a 
jury, Messrs. J. M. Lampert and J. B. Musser appearing 
as counsel for the plaintiff, and Messrs. R. L. Garvin 
and R. L. Slaughter appearing for the United States. 

The Clerk, under directions of the Court, proceeded 
to draw from the jury box the names of twelve persons, 
one at a time, written on separate slips of paper, to secure 
a jury. C. E. Renberg, whose name was so drawn, was 
excused for cause; August Meppen, whose name was 
also drawn, was excused on the plaintiff's peremptory 
challenge; and P. M. Hill and John D. Henion, whose 
names were likewise drawn, were excused on the defend- 
ant's peremptory challenge. 

Following are the names of the persons whose names 
were drawn from the jury box, who were sworn and ex- 
amined on voir dire, found duly qualified, and who were 
sworn to well and truly try said cause and a true verdict 
render, to-wit : 

Lawrence Bybee 
Verl Hall 



24 United States of America vs. 

James Hibbard 

John H.'Stoneman 

J. B. Nelson 

Homer Williams 

S. W. Orme 

Ed Ellsworth 

D. C. Brown 

A. H. Aamoth 

James P. Johnson 

P. E. Long 

After a statement of the plaintiff's case by his counsel 
and an oral stipulation between counsel of certain facts, 
Richard Bishoff, N. H. Leshman, J. N. Williams, H. W. 
Humphrey, D. E. Butler, and Hyrum Lewis were sworn 
and examined as witnesses and other evidence was intro- 
duced on the part of the plaintiff. 

After admonishing the jury, the Court excused them 
to. nine-thirty o'clock A. M. on Wednesday, October 18, 
1933, and continued the trial to that time. 



Park Lusk 25 

(Title of Court and Cause) 



COURT MINUTES OF OCTOBER 18, 1933 

The trial of this cause was resumed before the Court 
and jury. Counsel for the respective parties being pres- 
ent, it was agreed that the members of the jury were all 
present. 

Mrs. Dave Lusk, R. C. Noble, David Lusk, Mrs. Park 
Lusk, Park Lusk, C. E. England and Dr. Ellis Kackley 
were sworn and examined as witnesses on the part of the 
plaintiff. 

After admonishing the jury, the Court excused them 
to nine-thirty o'clock A. M. on Thursday, October 19, 
1933, and continued the trial to that time. 



(Title of Court and Cause) 



COURT MINUTES OF OCTOBER 19, 1933 
The trial of this cause was resumed before the Court 



26 United States of America vs. 

and jury, Counsel for the respective parties being present, 
it was agreed that the members of the jury were all pres- 
ent. 

Dr. C. P. Groome was sworn and examined as a wit- 
ness on the part of the plaintiff, and here the plaintiff 
rests. 

The defendant's counsel at this time moved the Court 
to direct the jury to return a verdict in favor of the de- 
fendant. After hearing counsel on the motion, the Court 
denied the same. The defendant was granted exceptions 
to the order. 

After a statement of the defense by the Government's 
counsel, George A. Meffan, W. D. McReynolds, Dewey 
Forrest, Clark Cameron, M. V. Tallon, Claude Bistline 
and Dr. P. J. Germon were sworn and examined as wit- 
nesses and the depositions of Dr. Charles H. Sprague 
and Dr. G. E. Riggs were read and other evidence was 
introduced on the part of the defendant, and here both 
sides close. 

The defendant's motion for an instructed verdict was 
renewed. After hearing counsel on the motion the Court 
denied the same. The defendant's counsel asked and was 
granted exceptions. 

The cause was argued before the jury by counsel for 
respective parties, after which the Court instructed the 
jury, and placed them in charge of a bailiff duly sworn, 
and they retired to consider their verdict. While the jury 



Park Lusk 27 

was still out, the Marshal was directed to provide them 
with dinner at the expense of the United States. 

The jury was instructed in case of their agreement to 
seal the verdict and to return the same into court at nine- 
thirty o'clock A. M., Friday, October 20, 1933, and the 
bailiff was directed to permit the jurors to disband upon 
their arrival at a verdict. 



(Title of Court and Cause) 



COURT MINUTES OF OCTOBER 20, 1933 

The jury in this case returned into court and asked 
further instructions on the definition of permanent and 
total disabiHty. The Court further instructed the jury, 
after which they retired to further consider of their ver- 
dict. 

On the same day the jury returned into court, where- 
upon, they presented their written verdict, which was in 
the words following : 



28 United States of America vs. 

(Title of Court and Cause) 



VERDICT 



"We, the Jury in the above-entitled case, find for 
the plaintiff and fix the date of the beginning of his 
permanent and total disability from June 29th, 1919. 

D. C. BROWN, Foreman." 

The verdict was recorded in the presence of the jury 
and then read to them and they each confirmed the same. 

The defendant's counsel asked and was granted ex- 
ceptions to the filing of the verdict and sixty days in 
which to prepare, serve and file proposed bill of excep- 
tions. 



(Title of Court and Cause) 



COURT MINUTES OF DECEMBER 27, 1933 

The defendant's motion for a new trial came on for 
hearing before the Court. 

After hearing counsel for the respective parties on the 
moti(jn the Court took the same under advisement. 



Park Lusk 29 

(Title of Court and Cause) 



VERDICT 
Filed October 20, 1933. 

We, the Jury in the above-entitled case, find for the 
plaintiff and fix the date of the beginning of his perma- 
nent and total disability from June 29th, 1919. 

D. C. Brown, Foreman. 



(Title of Court and Cause) 



JUDGMENT 
Filed October 20, 1933 

This cause coming on regularly to be heard on the 17th 
day of October, 1933, before the court and a jury, J. M. 
Lampert of the firm of Oppenheim and Lampert, and J. 
B. Musser appearing as counsel for plaintiff and John A. 



30 United States of America vs. 

Carver, United States District Attorney, and John F. 
Garwin and R. L. Slaughter, special counsel for the Unit- 
ed States District Attorney, appearing for the defendant. 
A jury was duly drawn, impanelled and sworn and the 
plaintiff and defendant introduced evidence. 

Whereupon the court submitted the cause of the jury 
on October 19, 1933. 

Thereupon the jury retired and on the 20th day of Oc- 
tober, 1933, returned to the court, counsel for the parties 
being present, and presented their written verdict in 
words and figures as follows : 

IN THE DISTRICT COURT OF THE UNITED 

STATES FOR THE DISTRICT OF IDAHO, 

EASTERN DIVISION. 

PARK LUSK, 

Plaintiff, 
vs. 
UNITED STATES OF AMERICA, 

Defendant. 

No. 837 
VERDICT 

We, the jury in the above entitled action, find for the 
plaintiff and fix the date of the beginning of his perma- 
nent and total disability from the 29th day of June, 1919. 

D. C. BROWN, 

Foreman. 



Park Lusk 31 

The said verdict was duly recorded in the presence of 
the jury, read to them and they each affirmed the same. 

Whereupon upon said verdict 

IT IS ORDERED, ADJUDGED AND DECREED 
and the court does hereby order, adjudge and decree : 

I. 

That the Plaintiff, Park Lusk, became and was totally 
and permanently disabled on the 29th day of June, 1919, 
and ever since the said date has been and now is totally 
and permanently disabled and that there is due and owing 
from the defendant to said plaintiff, Park Lusk, upon the 
policy of war risk insurance as described in the complaint 
in this action, and that the plaintiff do have and recover 
from the defendant the sum equal to the accrued payments 
now due and owing. Fifty-seven and 50/100 Dollars 
($57.50) per month from the said 29th day of June, 
1919, to and including the month of October, 1933, or a 
total of one hundred seventy-two (172) monthly pay- 
ments, being the sum of Nine Thousand Eight Hundred 
and Ninety and no/100 Dollars ($9,890.00). 

II. 

IT IS FURTHER ORDERED, ADJUDGED AND 
DECREED that ten percent (10%) of all sums paid to 
said plaintiff under this judgment is hereby fixed as a 
reasonable attorney's fee to be allowed the attorneys for 



32 United States of America vs. 

said plaintiff, Messrs J. M. Lampert and J. B. Musser, 
the same to be apportioned as follows : 

Five percent (5%) to J. M. Lampert 

Five percent (5% ) to J. B. Musser 
the same to be paid to said attorneys at their addresses at 
Boise, Idaho, the post office address being as follows : 

J. M. Lampert, Post Office Box 637, Boise, Idaho 

J. B. Musser, Post Office Box 1391, Boise, Idaho, 
and the same to be paid by the United States Veterans 
Bureau out of payments to be made to said Park Lusk, or 
to his estate, or to the beneficiary or beneficiaries under 
said war risk insurance contract, all as provided by law. 

Dated at Pocatello, Idaho, this 20th day of October, 
1933. 

CHARLES C. CAVANAH, 
District Judge, 
United States District Court. 



(Title of Court and Cause) 



ORDER EXTENDING TIME FOR FILING 
BILL OF EXCEPTIONS 
Filed December 12, 1933 
Good cause appearing therefor, 

IT IS ORDERED that the defendant have to and in- 



Park Liisk 33 

eluding the 5th day of January, 1934, in whieh to prepare, 
serve and file Bill of Exceptions in the above entitled 
cause. 

Dated this 12th day of December, A. D., 1933. 

CHARLES C CAVANAH, 

District Judge. 



(Title of Court and Cause) 



ORDER EXTENDING TIME FOR FILING 

BILL OF EXCEPTIONS 

Filed December 29, 1933 

Good cause appearing therefor, 

IT IS ORDERED that the defendant have to and in- 
cluding the 19th day of January, 1934, in which to pre- 
pare, serve and file Bill of Exceptions in the above en- 
titled cause. 

Dated this 29th day of December, A. D., 1933. 

CHARLES C. CAVANAH, 

District Judge. 



34 United States of America vs. 

(Title of Court and Cause) 



ORDER EXTENDING TIME FOR FILING 
BILL OF EXCEPTIONS 

Filed January 16, 1934 

Good cause appearing, 

IT IS ORDERED that the defendant have to and in- 
cluding the 18th day of February, A. D., 1934, in which 
to prepare, serve, and file Bill of Exceptions in the above 
entitled cause. 

Dated this 16th day of January, A. D., 1934. 

CHARLES C CAVANAH, 

District Judge. 



(Title of Court and Cause) 



BILL OF EXCEPTIONS 

Lodged January 27, 1934 
Filed March 5, 1934 

BE IT REMEMBERED, That the above entitled 



Park Lusk 35 

cause came on to be heard before the Honorable Charles 
C. Cavanah and a jury at Pocatello, Idaho, on October 
18, 1933, the same having been transferred for trial to 
the Eastern Division from the Southern Division where 
the same was for the purpose of hearing defendant's de- 
murrer to the Complaint, by stipulation of counsel, upon 
the issues formed by plaintiff's Complaint and defendant's 
Answer thereto, Oppenheim and Lampert, by J. M. Lam- 
pert, and J. B. Musser, all of Boise, Idaho, appearing as 
attorneys for the plaintiff, and John Carver, United 
States Attorney, E. H. Casterlin, Assistant United 
States Attorney, Frank Griffin, Assistant United States 
Attorney, all of Boise, Idaho, and John F. Garvin, Attor- 
ney, Department of Justice, of Washington, D. C, and 
R. L. Slaughter, Attorney, Department of Justice, of 
Boise, Idaho, appearing as attorneys for the defendant, 

WHEREUPON, the following proceedings were had, 
after plaintiff's opening statement: 

It was stipulated and agreed that the plaintiff entered 
the military service of the United States on September 
17, 1917; was discharged therefrom May 8, 1919; that 
the insurance policy was issued and became effective 
April 25, 1918, and was effective until June 30, 1919, the 
premiums having been paid to and including the month 
of May, 1919; that a disagreement exists; that residence 
is admitted; that the Court has jurisdiction of the cause 
of action. 

Thereupon, plaintiff's Exhibit No. 1, being a copy of 



36 United States of America vs. 

Rule 11, Exhibit No. 2, being regulation No. 1, and Ex- 
hibit No. 3, being the service record, were offered and 
admitted without objection and with the stipulation that 
the same may be read and used throughout the trial with- 
out taking time to read them at this point. 

JOHN RICHARD BISHOFF, a witness on behalf of 
the plaintiff, being first duly sworn, on oath testified as 
follows : 

DIRECT EXAMINATION 

I am John Richard Bishoff, of Pocatello, Route 1. I 
am acquainted with Park Lusk and have known him ever 
since I was eight years old. There have been intervals 
when I have not been in contact with him, during his 
army service. I didn't see him from 1917 until his dis- 
charge. I saw him in 1919 when he returned from the 
service at his brother's place at Arbon, Idaho. He 
seemed to be thinner than he was before. I knew the man 
before he left and when he came back he wasn't the man 
he was before. Since his discharge, I helped him fix his 
well — about four years ago. It was a driven well, 
around 180 feet deep, or 2 inch pipe with 20 foot sections. 
We had to pull the pipe out. Three of us worked at pull- 
ing the pipe. Plaintiff handled the vise mostly and the 
other two of us pulled the pipe. When we pulled the pipe 
up as far as we could, plaintiff would have to tighten the 
vise so we could get a new bite on it. I have worked with 
him on other jobs, one on a harvester and one graveling 



Park Lusk 2>7 

roads in the gravel pit. I worked on the harvester with 
him in the summer of 1920, for five days. It was a com- 
bine. During the five days on this job the plaintiff was 
driving the combine and team. I have driven a combine. 
The driver handles the team and takes care of the horses 
mornings, noons and nights. We continued that work for 
five days. 

'*Q. What did you notice about the plaintiff? 

A. The dust bothered him. 

MR. GARVIN : Object to his answer and move 
it be struck on the ground that it calls for a conclu- 
sion of the witness. He says the dust bothered him. 

THE COURT: Let's see what you mean, the 
dust bothered him. 

A. It made him cough. 

THE COURT : When he was at that work? 

A. Yes, sir, and it also bothered his eyes. 

THE COURT : Objection overruled. 

MR. GARVIN : Exception, if you please, Your 
Honor." 

I noticed his coughing. 

"Q. Did he do all his work? 

A. No, he did not. 

MR. GARVIN : Objected to on the same ground. 



38 United States of America vs. 

THE COURT: Denied. 

MR. GARVIN: Exception." 

During that five days' period I didn't notice anything 
else about the plaintiff. I worked with him in the gravel 
pit at Arbon, Idaho, for about thirty days in the fall of 
the year, but I don't remember exactly the year. The 
plaintiff was running a scraper. He scraped the gravel 
on the dump and dumped it into the trucks. He dumped 
the four-horse scraper. I was running a truck at the 
time. I saw him about every forty minutes or so, some- 
think like that. 

"Q. Did the plaintiff do the work assigned to him ? 

A. As far as I could see." 

That is about all I have worked with him. I saw the 
plaintiff the day he came back from military service at 
his brother's place. He was thin and about forty pounds 
lighter than when he went into military service. He was 
awful quiet. He used to be a great hand to joke, but he 
hardly said a word when he came back. I guess that is 
about all. He remained on the gravel job throughout the 
thirty days I was there. My best judgment is that he 
was there every day. He was working for Power County 
and that was five or six years ago anyway. 

CROSS EXAMINATION 

I live at Tyhee, 35 miles from the j)laintiff. I have lived 
there about two years and before that I lived at Arbon, 



Park Lusk 39 

where my place joined the plaintiff's. I lived there 
twenty-five years. I don't know how plaintiff came home, 
but it was sometime in May, 1919. The first time I 
worked with the plaintiff was a one day period three or 
four years ago on the well. 

"Q. Did he work all day that day on the well? 

A. Yes." 

The work on the combine, I think, was in September, 
1920. He worked five days driving the combine. I was 
working for him and he paid me. There were twelve 
horses on the combine and we put in about nine hours a 
day. He drove the combine all day long during the nine 
hours for a couple of days. The other three days he laid 
off. Plaintiff was then living with his brother, Dave 
Lusk, at Arbon. 

I couldn't fix the date when we worked on the high- 
way, but I am sure it was for thirty days. I was driving 
a truck and he was loading. He used a f resno scraper. 
It drags on the ground. It will hold about a yard if load- 
ed good and heavy. I would see him when he would come 
back to get loaded up. He would not be dumping the 
fresno all the time. There were several men doing that 
work. Every fellow would take his turn. That was 
about 1925. 

REDIRECT EXAMINATION 
*'Q. Did you observe the plaintiff handling the 



40 United States of America vs. 

scraper itself — the so-called fresno, or handling the 
reins and doing the driving? 

A. He was doing the driving and dumping it. 

Q. All the time you noticed him? 

A. Yes, sir." 

N. H. LEISHMAN, a witness on behalf of the plain- 
tiff, being first duly sworn, testified as follows : 

DIRECT EXAMINATION 

My name is N. H. Leishman. I live at Arbon, Idaho. 
I should judge about six miles from the plaintiff. I was 
just working out there the last four or five years. I 
have been acquainted with the plaintiff something like 
twenty-two years. I was there when he entered the mil- 
itary service. At that time he was residing with his bro- 
ther on his father's place. I went to Montana in the 
spring of 1919 and I didn't see Park Lusk until after I 
came back in 1925. I can't remember the particular place 
where I met him, but it was in the Valley, where we both 
lived. I worked with him that summer. The first work 
was on an irrigating ditch. We were cleaning out quite 
a long, large ditch. We were using a slip scraper with 
one team. It made him puff more, kind of loud and 
wheezy like. He was breathing hard. Prior to 1925 I 
hadn't seen plaintiff for five years but he wasn't as heavy 
a man as before. I don't know how much lighter. I am 
not a judge of weight; from about 10 to 15 pounds. In 



Park Lusk 41 

1925, when I was working with the plaintiff, I slept with 
him for about a month. He would sometimes get up in 
the night and sit up in bed, coughing. It seemed to be 
the usual thing when I was there. We also took our 
meals at the same table. It was in the spring of the year 
when we were cleaning the ditch. That work lasted 
about a month in May or June, 1925. I saw plaintiff 
vomit at times. He couldn't hold his stuff on his stom- 
ach. That occurred maybe an hour — a half hour perhaps 
after breakfast. I saw that twice. I never paid much 
attention to his appetite. During that thirty days, I 
also saw plaintiff plowing. There were some days he 
didn't work all day. He came to the house. The ordi- 
nary man wouldn't do that. At times he left the field 
before the rest. When we came in, he would be in the 
house lying down, most generally until meals were ready 
in the evening. I have seen him take medicine in the 
evening before going to bed. 

CROSS EXAMINATION 

My name is N. H. Leishman. I Hve at Arbon. I was 
in the Valley at the time plaintiff left for the Army. Be- 
fore he entered the army I might not have seen him for 
maybe a week. I am not related to him. I don't know 
how much he weighed when he entered the army. He 
was quite a lot heavier than I was. I weigh 140. I 
should say he weighed about 165. In 1925, he weighed, 
possibly 150 pounds. I never did try to judge his weight. 
I am just using my best judgment. I didn't see the plain- 



42 United States of America vs. 

tiff after his service until 1925, when I worked with him 
about a month cleaning the ditch. Plaintiff drove a team, 
I loaded the scraper and helped him unload it. We were 
using two horses. During that time he lived with his 
brother. He was not married, but he had been. I was 
associated with him about a month in 1925 and a little 
after that, but I didn't work with him any more than a 
month, but I saw him out there at times after that month. 
The time in 1925 when I was with him was about a 
month. I did not work every day on the ditch; I don't 
know how long the ditch work took us, but when we got 
done I went plowing and did other things. We finished 
the ditch job. It was during the month, in 1925, that I 
saw him take medicine at meal time. I don't know what it 
was he would take at that time. I know it was medicine, 
but I don't know what kind. 

J. N. WILLIAMS, a witness on behalf of the plain- 
tiff, being first duly sworn, testified as follows : 

DIRECT EXAMINATION 

I am J. N. Williams of Crystal. I have known Park 
Lusk three and one-half years. I moved over in that part 
of the country and he was a neighbor. I lived about one 
and one-half miles distant. Our lands do not adjoin. I 
have seen him at work in the field, plowing. I noticed 
he was quite slow in doing his work and was out of the 
field many days. 

"Q. Did he stay in the field on all occasions dur- 



Park Lusk 43 

ing the ordinary working hours of the plowing day ? 

A. Well at that time I seen him he was there." 

I saw he was not in the fields some of the days. On a 
few occasions I have worked with him on the same job, 
killing pigs, fixing a well and going up the Canyon after 
wood. This all happened in the fall of 1932. I have seen 
him cough a lot and wheeze when he is doing particu- 
larly heavy work — heavy lifting. I have seen him sit 
down and rest. He would rest during the time when 
others were continuing to work, during the ordinary 
working hours of the day. 

"Q. How long a period of time would he be rest- 
ing on these occasions ? 

A. Fifteen or twenty minutes at a time. 

Q. Would that occur on each of these jobs I have 
been discussing, the sawing wood, and killing pigs, 
and fixing the pump or well? 

A. Yes. 

Q. Over how long a period of time were you en- 
gaged in canyon work, or hauling wood? 
A. About two or three days. 
Q. And killing pigs ? 
A. One day. 

Q. And fixing the pump, about how long a per- 
iod of time were you engaged at that ? 

A. About half a day." 



44 United States of America vs. 

CROSS EXAMINATION 

I saw him plowing from my field about a mile away. 
From where I was, I could look over a mile to see Mr. 
Lusk plowing in his field. I was not in my field every 
day, but most every day. I missed Sundays. I was in 
the field six days a week. We do our plowing in the 
spring. I could see him when he was in the field and 
when he wasn't, I knew it. He never did help me kill 
my pigs, but I helped him kill his. We worked half a 
day fixing the pump and went to the woods two or three 
days to haul wood, two days I believe. On these occa- 
sions, we didn't fix any hard working hours. Every man 
took his wagon and team along. It was not much of an 
outing. We helped each other. It was mostly dry wood 
and was all laying down and we just had to pick it up. 

H. W. HUMPHRY, a witness on behalf of the plain- 
tiff, being first duly sworn, testified as follows : 

DIRECT EXAMINATION 

I am H. W. Humphry of Crystal. I know the plaintiff 
and became acquainted with him at harvest time in 1932. 
At that time, I sewed sacks and plaintiff was driving a 
combine. We cut about 200 acres together and he cut 
a quarter down below before I worked with the outfit. I 
was not with him when he cut the quarter. I was associ- 
ated with him for ten days, during which time he lost 
two and one-half days about. 



Park Liisk 45 

"Q. Was there work to do during those two and 
a half days ? 

A. Yes, sir." 

During the ten days' period, the condition of the field was 
all right for working and the condition of the machinery, 
horses and equipment was all right. I noticed his hoarse- 
ness and a bad cough more than anything else. When- 
ever he started to work he would have a short coughing 
spell before. I do not believe that during the ten day 
period he was more hoarse one time than another, or had 
more serious coughing, no more than that he was not 
hoarse when he started. He was not hoarse when he 
started to work. 

"Q. How about the continuity of work through- 
out the working hours of the day. Did you keep 
operating all day long ? 

A. Practically so. Yes. 

Q. You say practically so, what happened if any- 
thing? 

A. Well in the way you spoke I don't quite un- 
derstand. There would be stops for such as oil and 
that was all. 

Q. What did the plaintiff do while the oiling was 
being done. Did the plaintiff do the oiling? 

A. No, he did not oil. 



46 United States of America vs. 

Q. What did the plaintiff do? 

A. There was nothing else to do." 

Plaintiff was doing the driving. There was nothing un- 
usual or unnatural about his driving any more than that 
he would call for a five once in a while. Calling for a 
five means to stop and rest. About his starting and stop- 
ping, he did that right along. When he started the team, 
in place of throwing the machine in gear as most men 
would, on account of his voice he started the team first 
and then threw the machine in gear. I noticed nothing 
more about his eyes during that harvest period than that 
they were blood shot and red. I should say they were 
more so when he was not running the harvester. 

CROSS EXAMINATION 

His eyes being blood shot was a general occasion, not 
any particular day. The two of us covered about 180 
acres in ten days, with the combine. We used eight 
horses and he was driving the team and occasionally the 
machine would stop and we would rest five minutes. That 
is not common, if that is what you mean. 

"Q. But he was driving the horses all right, 
wasn't he? 

A. Yes. 

Q. And the principal difficulty you noticed was 
that he was hoarse and couldn't talk to the horses, 
is that it, when he was driving them? 



Park Lusk 47 

A. Yes. 

Q. He was, however, able to holler 'whoa' to 
the horses and stop them when they were going? 

A. I think he was. 

Q. Eight horses. There aren't very many men 
can drive eight horses are there? A pretty good 
teamster, isn't it that can do that ? 

A. No, it is usually considered a boy's job. 

Q. Can an ordinary man ordinarily drive over 
four horses ? 

A. I believe he could." 

I lived five or six miles from Mr. Lusk. I wouldn't say 
I have ever visited with them. I wouldn't say I have ever 
been to his house only during the harvest or to stop going 
along the road. 

J. E. BUTLER, plaintiff's witness on behalf of the 
plaintiff, being first duly sworn, on oath, testified as fol- 
lows: 

DIRECT EXAMINATION 

My name is J. E. Butler. I live at Arbon. I have known 
plaintiff for about twenty years. I saw him three or four 
days before he started for the army and I again saw him 
about a week or ten days after his return. This was at 
his brother's place. When I saw him after his return, his 
voice was heavy, might say, hoarse like. I would take 



48 United States of A jn erica vs. 

him to be possibly 25 or 30 pounds lighter in weight. His 
eyes were blood shot. He was awful quiet. I don't re- 
member any other changes. Since his return from mili- 
tary service I have seen him in the field plowing and on 
the harvester some. I think more than once. Since he 
came back, I see him from time to time throughout the 
year. He did not plow right along through the plowing 
season. While he was plowing or working in the harvest 
field I was not close to him, but I noticed that he was 
awfully irregular with his work. We visit back and forth 
some. I saw him have some kind of a spell at my place 
one day. One day this summer. There were several 
neighbors there and the men folks were sitting out in 
the yard. Mr. Lusk was squatted on his heels and he 
apparently tried to get up, but he couldn't make it and he 
fell to his hands and knees and crawled, I should say, 
six or eight feet. Then he stayed there on his hands and 
knees for a little bit and finally got up. 

''Q. Did you ever take any meals at his house or 
he at yours? 

A. Yes, sir. 

Q. Did you observe anything unusual after his 
taking meals ? 

A. No." 

I worked with him on the road Mr. Bishoff talked 
about. Plaintiff was driving a team on a f resno part of 
the time. At times he was there and other times he had 



Park Lusk A9 

to quit driving the team. When he wasn't driving, once 
or twice, he would sit by kind of a camp fire we had. He 
left the job one or two days. I don't know where he went. 
I don't know what time it was — in the afternoon some- 
time. When he left, someone would be doing the work 
he had been previously doing. I have been in the Can- 
yon with him hauling wood. He had two or three boys 
with him on one occasion and they were helping him get 
his wood. I helped him load it. 

''Q. Did you observe anything as to his physical 
condition while at that work, anything you could see 
or hear about him or his acts ? 

A. I don't know as I did." 

CROSS EXAMINATION 

I have known plaintiff about twenty years, all of which 
time I have been friendly with him. I don't know ex- 
actly how long it was I saw him before he went to war, 
probably three or four days. I don't know how much he 
weighed at that time. He weighed possibly 170 pounds 
when he went to war. I should say he weighed around 
140 pounds when I saw him after he came back. I saw 
him possibly a week or ten days after he came back. I 
worked with him getting in wood and I worked on the 
road job where he was working. I worked about thirty 
days and he worked about the same time. I remember 
talking with some man representing the Veterans Bu- 
reau, but I don't remember his name. I don't believe I 



50 United States of America vs. 

told this man that the only time I have worked with the 
plaintiff was for some four or five days. I don't think 
it is a fact I told this man, 'I think he was driving a team, 
but I am not sure." I couldn't say as to whether I did 
or did not tell this man that we did not exchange farm 
work together. 

"Q. Will you say that you didn't have the con- 
versation that I have asked you with reference to — 
this, or this in substance: I think he drove a two 
horse team on this job (referring to the road job). 
That took place about four years ago when you were 
working together ? 

A. In 29 I believe it was. 

Q. Well, will you say you didn't say this or this 
in substance 'that we worked a few days together 
on the road job and I think the plaintiff in this case 
drove a two horse team on this job ?' 

A. I believe he did part of the time. 

Q. Will you say you didn't make that statement 
to this man — that is what I want to know. Did you 
make the statement or didn't you make it? 

A. What's his statement again. Read it. 

Q. It was to the effect that you worked about 
four yedrs ago with him for four or five days on a 
road job and that you thought at that time he was 
driving a two horse team. 



Park Lusk 5 1 

A. I don't know whether I did or not. 

Q. Will you deny that you did make that state- 
ment ? 

A. No, I wouldn't deny it." 

HYRtJM LEWIS, a witness on behalf of the plain- 
tiff, being first duly sworn, testified as follows : 

DIRECT EXAMINATION 

I am Hyrum Lewis, I live at Malad at the present 
time. I have known the plaintiff continuously for about 
twenty years. As I remember it, his farm joins mine. 
I have lived about two and one-fourth miles from him. 
I have worked with him in the fall running a combine. 
I handled the bagger part. Besides the two of us, Mr. 
Lusk had two boys on that job. They helped both him 
and me — fight weeds and doing what they possibly could. 

"Q. When you went out with the combine in the 
morning, did Mr. Lusk go with you each and every 
morning ? 

A. Yes, sir. 

Q. And did he stay on the job throughout the day, 
every day you were operating the combine ? 

A. So far as I can recall. 

Q. Did the combine, or the men with the combine 
work throughout the day or were there interrup- 
tions ? 



52 United States of America vs. 

A. Only when our machine broke down — we had 
several break downs with our machine." 

The boys were cutting weeds and helping hook up 
and unhook the horses. I noticed nothing else I can re- 
call at the present time. I helped him put in his well in 
1932. We pulled pipe out to see what was the matter, 
with a block and tackle and horses. I handled the pipe 
and Mr. Lusk drove the horses. I think there was noth- 
ing else as I recall it. It took about a day and a half to 
complete the well. I think he and I went to the Canyon 
in the fall of 1932, hauling wood. The wood was dry and 
we gathered it together, sometimes we took our horses 
and pulled it to the wagon and other times we would pick 
it up and carry it to the wagon. 

"Q. Did Mr. Lusk work through the day with 
you continuously? 

A. Yes, but sometimes he left it until we re- 
turned. 

Q. I am asking as to his work? Did he work 
throughout the day? 

A. He got his load out and I got mine and we 
helped each other load. 

Q. How long a job was that? 

A. In the neighborhood of half a day, maybe 
more." 

A neighbor and I went over to his place last fall and 



Park Lusk 53 

sawed his pile of wood. This was Mr. WiUiams. We 
made no charge. Mr. Lusk was there and he would help 
us. 

''Q. What, if anything, did you observe as to his 
physical condition in doing that work? 

A. I never noticed anything." 

We started the harvesting work about the 11th or 12th 
of August and I don't know just when in September we 
quit. I was not through in September, but he released 
me so I could move my family to Malad. 

MRS. DAVE LUSK, a witness on behalf of the plain- 
tiff, being first duly sworn, testified as follows : 

DIRECT EXAMINATION 

I am Mrs. Dave Lusk, plaintiff's sister-in-law. I have 
known the plaintiff twenty-five years or more. I saw 
Park Lusk just before he left for the military service 
and after he returned he came right down to our place. 
He stayed with our family seven months and took his 
meals there. When he returned he was much lighter in 
weight and he had a terrible cough and his eyes were bad. 
They were inflamed and running. He had a sore on his 
hand. He took his three meals at the same table with me. 

"Q. Did he eat each and every meal at the table 
with you and the rest of the family ? 

A. Yes, I think most of the time he did." 



54 United States of America vs. 

After breakfast he would go outside and vomit his 
breakfast. There was a log on the north end of our house 
and he used to make for there, and he would lean on the 
log and lose his breakfast. That happened every morn- 
ing. At times he would vomit his supper. He went to 
the field to work along with the other men. He didn't 
remain all day long, not all the time. Some days he came 
to the house at 11 o'clock or 11 :30 and would rest until 
noon. He never got out in the field as early as the other 
men. He would come in and lie down sometimes, and 
sometimes he would sit with his hands in his lap and his 
head down. After this seven months' period, he and his 
wife Hved a few hundred feet of our house up until she 
died, on February 22, 1922, and then he lived with us 
for about five years, I think. During all of this time he 
was associated with my husband in farming. I had an 
opportunity to observe him in the field doing just the 
general farm work. 

"Q. Fall harvesting, harrowing and things of 
that kind? 

A. He never harrowed. 

Q. Did he plow? 

A. Yes. 

Q. One day after another? 

A. Not always." 

Sometimes he stayed in the house and either our hired 



Park Lusk 55 

man or my husband would take the plow and finish. The 
first year he started to combine and ran about six days. 
When he left the combine he came to the house and just 
sat around — stayed around the house. I saw him take 
these coughing spells and he would cough until he would 
vomit. He came back in 1919, and he remained with us 
until about 1927. During that time I don't think he had 
any treatments, but just had home remedies. I put mus- 
tard plasters on his chest and back. Every fall he would 
take a cold. It would start about October and last until 
the next spring. He would have a terrible cough. Some- 
times I would think it was pneumonia and I would put a 
plaster on his chest and back. I did that many times. My 
husband and I did this and his mother prescribed mus- 
tard plasters for him. 

CROSS EXAMINATION 

My husband is plaintiff's brother and I am a sister of 
plaintiff's first wife. He was much lighter when he re- 
turned from the army. When he left for the army he 
weighed 165 or 170 pounds. When he returned I think 
he and my husband weighed and he weighed between 140 
and 142 pounds. He now weighs about 145 or 146. When 
he returned, his wife was at our place. When he went 
into the field, I could sometimes see him work and some- 
times he was back of a hill. I would have my ordinary 
home duties, but I would always know when he came to 
the house. During that morning and afternoon I would 
be busy about housekeeping. 



56 United States of America vs. 

ARCHIE N. NOBLE, a witness on behalf of the 
plaintiff, being first duly sworn, testified as follows : 

DIRECT EXAMINATION 

My name is Archie Noble. I live at Pocatello and have 
been personally acquainted with the plaintiff five years 
this fall. He married my full sister. I lived near Mr. 
Lusk and I have been out there working as long as a 
month at a time. For a year I had a ranch of my own 
about a mile and a quarter from Mr. Lusk's ranch. That 
was in 1928. That year, as I remember, I helped him 
in the spring work. I harrowed and plowed for him and 
the next spring I moved out on my place and we exchang- 
ed work. I used his horses and did things for him in re- 
turn. In the fall I went out to seed my place and I think 
I used his horses again and I went back and helped him 
seed his place. I noticed he was awful slow in getting 
out to work and that he didn't work like an ambitious 
man and go ahead and make the best of it, but he would 
scab on working. Every morning while I was there I 
was out in the field plowing although he was late at get- 
ting out and he was always late in the afternoon. In the 
fall I boarded at his place for a week. He used to get 
up early in the morning and get his horses. He would 
meet me at the gate and we would harness them together. 
I would go on to my field and after I had been down there 
an hour or so he would come to his field. He was always 
late getting out to work. He walked slow. He didn't 
work like he had much ambition or desire to get through 



Park Lusk S7 

and carry on like a man does during the busy season. 
One or two mornings he didn't start at all, or not until 
nearly noon. He just looked and worked like he didn't 
have any incentive in his work. 

CROSS EXAMINATION 

"Q. Mr. Noble, Mr. Lusk is a good horseman — 
a good hand around horses, isn't he ? 

A. I think he is. 

Q. A good workman if he wants to work ? 

A. I think he understands the work and could do 
good. 

Q. He just doesn't seem to have any ambition. 

A. That is the way it appears. 

Q. You say he was late getting out to work in 
the fields many mornings and that he seemed slow 
in his movements, do you know whether or not he 
had been drinking? 

A. I don't know for sure whether he had or not. 

Q. You had seen him any number of times and 
when he should have been working, he was drink- 
ing. 

A. I have seen him drunk a number of times." 

DAVID LUSK, a witness on behalf of the plaintiff, 
being first duly sworn, testified as follows : 



58 United States of America vs. 

DIRECT EXAMINATION 

I am David Lusk, plaintiff's brother. I was farming 
in 1917. Park Lusk was my partner. That was at Ar- 
bon. We had 350 acres. I acquired that farm, I be- 
lieve in 1913. We were equal partners on what we bought 
there. I had 160 acres of my own and some horses. That 
partnership lasted until about seven years ago. I oper- 
ated it as a partnership during the war while my brother 
was away. All that I made I paid to my father and mo- 
ther in payment of the place. We bought it from them. 
It was not quite fully paid for when the war ended. 
There was a balance of approximately $500.00. He was 
right there with me all the time before he left for war, 
and when he returned I met him at the depot. He was 
quite a lot thinner than when he left and he had a cut on 
his hand, I believe it was the right hand, and after he 
came out home, I could see a big change. Before he went 
away, he was a great hand to go to dances and play ball, 
and after he came back, he wouldn't go to dances and 
never did play ball again. He was sitting around the 
house with his head in his hands. His eyes were blood 
shot. He had a cough. If he got in any dust, the cough 
got worse and he got hoarse. When he put any exertion 
into his work, lifting, such as handling wheat sacks, he 
got short of breath. He would puff awful heavy. He is 
that way now. All of those things have continued from 
the time he first came home until the present. It was 
approximately six months after he came home before he 



Park Lusk 59 

did anything. During that six months he went to Malad 
for probably a couple of weeks and then he came home. 
I believe his first work was haying, about the last of 
June. We had about twenty acres of hay and about 
twenty of wild hay meadow. We put up the hay with a 
push rake. He mowed and ran the push rake. That took 
about six or seven days altogether. He may have missed 
one or two days' work. I can't be sure. The next work 
was harvesting. Park Lusk ran on a drive for about 
twenty days. He worked about a week and I noticed he 
was not getting out like he should in the mornings and 
afternoons. I went on the machine and drove and he 
came home and went into the house. I stayed about 14 
or 15 days until I finished a cutting. He stayed in 
the house. The summer of the first year, he came home 
we drilled for about two weeks. Park did not work every 
day. When not working, he stayed in the house and 
didn't do anything and I did the drilling. He just got 
hoarse and all choked up and it was hard for him to 
breathe. His eyes would run. I think that was all the 
work we did together that summer. Before he went to 
war, he used to haul wheat sacks to market. He would 
go out and load up fifty sacks on a wagon all by himself. 
When he came back, he couldn't do that. He tried. He 
couldn't Hft one. He could lift it, but he couldn't load it 
up. The sacks average from 120 to 125 pounds. The 
next year we started to summer fallow in April or the 
first of May and when we finished up we harrowed, then 



60 United States of America vs. 

weeded and then put the hay up and harvested and then 
drilled. On that sort of farm, that is the work year after 
year until about the 1st of November. 

"Q. Did Park help you each and every year un- 
til he moved away from that place ? 

A. Yes, sir. 

Q. Can you give us about when he moved from 
your place? 

A. About six or seven years ago, I believe it 
was." 

After 1919, well he plowed. He never did much har- 
rowing. He tried to harrow and he just quit — got all 
choked up with the dust and his eyes would run. That 
was work which needed to be done and I had to send 
someone else to do it, the boys sometimes, and sometimes 
I did it. 

"Q. The haying — did he always help through 
that? 

A. No not clear through. Sometimes he did and 
sometimes he didn't. 

Q. The amount of work — that is the length of 
time you were haying each of those years — was it 
about the same or did it vary? Did you have more 
acreage one year than another ? 

A. It was about the same." 



Park Lusk 61 

Then it was harvesting with a combine. For a while 
we just had two men and then I bought a machine that 
took three. Park didn't go clear through with the work 
some years. His eyes would run and he would cough 
and get short of breath. He would have to stop and go 
off the machine. Sometimes he would leave the job en- 
tirely and sometimes he would sit down and rest a while, 
drink some water and clear it up. Those periods lasted 
from 15 to 30 minutes. How often this occurred depend- 
ed on the dust. If the wind is just right and you are go- 
ing with the wind, the driver got a lot of dust and if there 
was no wind, he didn't get so much. Sometimes he would 
not be off as often as others. 

"Q. After the harvesting period you said some- 
thing about wheat sacks — yes. Well did Park do 
that work? 

A. Yes, sir. 

Q. And load sacks on to the wagon? 

A. Used to be two men do it. 

Q. After the war? 

A. After the war. 

Q. He helped at that ? 

A. Yes, sir. 

Q. How long did that take? 

A. Depends on how big a crop you had. 



62 United States of America vs. 

Q. Approximately generally on your farm? 

A. Ten days. 

Q. Did Park each year work throughout those 
ten days ? Did you hear me ? 

A. Not quite. 

Q. Did Park each year work throughout those 
ten days? 

A. Yes, sir. 

Q. And stay throughout the day? 

A. Before the war or after? 

Q. After, during those years you were in part- 
nership after the war ? 

A. No." 

I think there was only about two years we hauled sacks. 
I got another man. Park went to the house when he was 
not working during those occasions. After about the 
1st of November, we got wood from the hills. I nearly 
always got it. Sometimes my brother helped in that 
work, we went together. Before he went to the army 
he would chop a load and not sit down to rest and it didn't 
seem to tire him. After he came home he would hit a 
few licks and sit down and rest and then get up and chop 
some again. When he chopped a while, he would sit 
down and cough and he got out of wind. After bringing 
in wood, that is about all except feeding the horses. The 



Park Lusk 63 

winter work is just chores. I was road commissioner 
for nine years. I retired two years ago this fall. We 
did work in the spring and fall. One year we put in ap- 
proximately thirty days, another spring about two weeks, 
and from five to six days up to about thirty days. The 
work was mostly grader work. Two or three times we 
used scrapers. It was all kinds of work. During that 
period of thirty days, our work was hauling gravel. My 
brother was there driving a two horse scraper. He did 
not handle the scraper. One man at one end loaded and 
one man at the other end dumped. This work was not 
done by Park. He did not continue the thirty days. He 
was off four or five days, if I remember, at different 
times. When he was off, he was not there. That is about 
all I know. On the days when he was there, he worked 
continuously throughout the eight hours or whatever the 
days' work was although there were times when his boys 
came down and drove his team for him. Then he would 
go over and sit down. 

"Q. What did you observe as to his physical con- 
dition while he was on that job — things you could 
notice, his acts and what he did ? 

A. I don't believe I noticed anything out of the 
ordinary." 

Park was home about six years after he came back 
from the service. He was in another house about a year 
or a year and a half. He was married. Then we lived 
about 150 feet apart. During the balance of that six 



64 United States of America vs. 

years he lived in my home and took his meals at the same 
table. After he came back after he had breakfast he 
would go out and vomit. That was practically every 
morning for the first year. After that period, I have 
seen him vomit. Sometimes he would get choked up on 
dust and cough and vomit out in the field harvesting. On 
the occasion of the road work he drove a grader quite a 
little from five or six days up to ten days. I don't know 
just exactly. At that time I hired his horses. I believe 
he was paid 35 cents an hour for his team. The teams 
were out there on the grader about seven hours a day. 
Sometimes I had from 4 to 8 head of his horses on the 
job. That would vary at different times. 

CROSS EXAMINATION 

I don't remember what year it was he put in thirty 
days work on the road. I have no record to fix it, just 
memory. I don't believe I could fix it within two years of 
the time. He was off four or five days during that per- 
iod of thirty days. I don't know what his reason was. 
He worked on the road about three years after he came 
back. No, sir, it was not more than four years ago when 
he worked the thirty days. 

He weighed about 165 pounds before he went to the 
army and I would say about 143 when he came back. 

''Q. If he weighed 142^ pounds when he was 
drafted into the army, what would you say he weigh- 
ed when he came back? 



Park Lusk 65 

A. I would say he weighed 143 pounds." 

The sacks that were left in the field, sometimes he 
would load them alone before he went to the army. 

"Q. The usual thing is two men? 

A. Practically always two men." 

I have seen a lot of men come out of the army that 
talked a lot and some that went overseas were pretty 
quiet. 

"Q. But there was nothing unusual about a man 
that was quiet. 

A. It was unusual about him. 

Q. All you want the jury in this case to under- 
stand is that when he came back from the army, he 
was more quiet than when he had gone to war ? 

A. Yes, sir." 

I have a ranch of 349 acres. During the period of 
six or seven years while we were partners in the ranch, 
after the expenses were paid we shared the profits equal- 
ly. After my brother left that ranch, he bought one of 
his own, 160 acres. When the two of us were operating 
together, in the spring sometimes we hired one man so 
that the three of us would do the work and run about a 
300 acre ranch. 

"Q. And then when the harvest came on you 
put on more help ? 



66 United States of America vs. 

A. No. 

Q. The three of you did it? 

A. Two of us — we just had a man in the spring 
to help with ditching. 

Q. And during that time you and your brother 
handled the crops and harvested all of those crops? 

A. Yes, sir." 

REDIRECT EXAMINATION 

When my brother left the ranch, I bought him out, 

MRS. PARK LUSK, a witness on behalf of the plain- 
tiff, being first duly sworn, testified as follows: 

DIRECT EXAMINATION 

My name is Mrs. Park Lusk, plaintiff's wife. We 
were 'married October 24, 1927. At that time Mr. Lusk 
was living on a ranch, pretty close to his brother's that 
he had just moved to. I had been married before and 
have three children. When Park Lusk and I were mar- 
ried, the oldest child was just about thirteen years old. 
I have known Park Lusk for twenty-two years. I think 
he was home from the service about a year or more be- 
fore I saw him. Following that, I might not have seen 
him more than once a year. He was very seldom seen 
anywhere away from his own home. I saw him at the 
store and church at Pauline. After his return from the 



Park Lusk 67 

service, I think the first thing I noticed was his voice. 
He couldn't talk — well I couldn't understand what he 
said ; then his eyes, his nervousness and his loss in weight. 
His eyes were awful blood shot and watery. His eyes 
are about the same now as the first time I saw him. I 
wouldn't say there was much material difference in his 
weight between the first time I saw him after the ser- 
vice, and now, but I am not much of a judge on weight. 
In 1927, I had a ranch on my hands and hired Park 
Lusk's machine to cut the feed and hay and he worked 
on the machine. He drove the machine. Bowen was 
with him some of the time. It took three or four weeks, 
I would say, to harvest that crop. Mr. Lusk did not work 
each and every day of those three or four weeks. I don't 
know exactly. He worked five or six days and then some- 
times he would be gone for two days and other times for 
half a day. I don't know where he was. He just got 
in a car and left and always took the hired man with him. 
The weather condition and the crops were such that he 
could have kept right on working. Just after the harvest 
in October, we were married and have lived together to 
the present time. We have been on that same place. He 
has farmed another — he had another ranch down close 
to his brother. 

"Q. Did you operate that. 
A. Yes." 

In 1928, he drove the combine and I had to hire men to 
help him with the sacks. He took two or three weeks to 



68 United States of America vs. 

it and was laid up sometimes two or three days at a time. 
He always came home after we were married. There 
was plowing. He did it part of the time. The rest of 
the time his oldest boy and my oldest girl of thirteen — 
the boy managed the horses and the girl managed the 
levers on the plow. They plowed five or six days at dif- 
ferent intervals. When the children were plowing, my 
husband was at home generally lying down. The boys 
always did the harrowing. I helped him with the seeding. 
I helped him fan the seed and helped him treat it. When 
I was doing that, he was generally out helping a little, 
some days he didn't go out. There was no hay. There 
was some fencing, but not a lot. That was 160 acre place 
with 140 acres seeded. We had twelve horses, one cow 
and a few pigs and chickens. As to gathering sacks set 
out in the field after harvesting, the ones we hired to haul 
the feed out, they picked up the sacks and took them 
away. Sometimes Park Lusk supervised it. After har- 
vesting there was straw to be gathered for the horses 
and getting out wood. Park never went for wood alone. 
Sometimes the neighbors would go, and sometimes I 
would go and sometimes the boys went. When I went, I 
helped gather up the wood, which is small wood. We 
both put it on the wagon. If he exerted himself a little, 
it would cause him to cough and then he would vomit. 
That is true of any exertion he makes. He has never 
gone after wood alone. From that place we moved to the 
place we are now on. The operations were the same on 



Park Lusk 69 

both places, both dry farms. The operations were similar 
each year. There was not much change in the plaintiff's 
physical condition. As to his meals, during those years, 
well he has not got a hearty appetite like a working man 
should have, like most men I have cooked for. I have 
taken boarders and I have noticed the appetites of men. 
I have seen my husband turn sick after meals. I have 
seen him get out of the house as soon as he could and I 
knew he was sick to his stomach. When I was in the 
field with him, I observed the same thing. I have seen 
him have coughing spells and sometimes he coughed so 
hard it would make him vomit. Mr. Lewis helped him 
on the combine this year and the boys and I finished. I 
sewed the sacks. I did that once before, four years ago. 
I put the sacks on the bagger and when it was full of 
wheat I sewed it and dumped it in the field. He was 
driving the horses. 

"Q. Did you work continuously through the 
day? 

A. I did, yes. 

Q. Did he? 

A. Yes." 

He has taken medicine. Every winter I have had to 
doctor him up for a slight attack of pneumonia but I 
think he nearly had it and I would put mustard plasters 
on him and give him mustard baths and he has taken 
some medicine. He would take his medicine in the even- 



70 United States of America vs. 

ing before he goes to bed. I do not apply mustard plas- 
ters except in the winter time. Sometimes he would take 
medicine throughout the year. He didn't always take it. 
We got some prescriptions and some just patent medicine. 
He does not eat regular food. He has been on a bread 
and milk diet ever since he came home. That is all he 
ever eats in the evenings, since I have lived with him. I 
put in about three days this year on the harvester and 
about two days four years ago. The boys always do the 
harrowing. 

CROSS EXAMINATION 

I have never had a doctor for my husband. After we 
were married, on October 24, 1927, we lived on his ranch 
the first year and next year moved on mine. Since that 
time, he has operated both ranches. Just one ranch a 
year is all we farm. Every year since 1927 we have had 
in about 140 acres of wheat. During the three days I 
worked on the combine in 1933, he was driving the team. 
That was because they needed someone and Mr. Lewis 
couldn't remain. Before 1927, I couldn't say I would 
see Park Lusk oftener than once a year, just merely 
spoke to him and passed the time of day. At the time I 
employed him, just before we were married, and he miss- 
ed those days, sometimes it rained and other times it 
didn't. I hired a machine from a man and Park Lusk was 
running a machine. I was interested in getting the grain 
harvested in good time. During that time, I would not 
be out in the field a great deal. The year I hired him to 



Park Lusk 71 

cut my grain, I think he cut a Uttle wheat for himself. 
The wood that we got was small. Anything a woman 
or child could lift. It took only a few hours to get the 
wood. They can get enough out in a week or ten days 
if they go every day. 

During this period Dr. Groom prescribed for him. 
That was before I married him, but he was still taking 
the medicine. I saw Dr. Groom's name on the bottle and 
assume he gave Mr. Lusk a prescription. He would have 
that filled occasionally. Every year since we have been 
married he would plow during the spring. The nine year 
old boy would do some harrowing, he did it all. That is 
a light job. I think he had about six horses. We had 
no hay. Park Lusk generally drove the combine when he 
could. That would require 8 to 12 horses and he would 
handle the team himself. When I was sacking grain, 
we would stop now and then — something would get the 
matter with the combine. He would stop sometimes when 
he would start to cough. He couldn't drive while he was 
coughing. During harvest we would start in about 10 
in the morning, quit two hours at noon, and work two or 
three hours in the afternoon. We could not get along 
any faster. He would have to stop quite often to cough 
and if the wheat came too fast, I would have to stop. I 
have seen him coughing at other occasions than when 
he was working in the dust, every morning when he first 
gets up and through the night a little. 

At this point witness identified Defendant's Exhibit 



72 United States of America vs. 

No. 4 as a letter written and signed by her. The letter 
was admitted in evidence without objection. 

" Crystal, Idaho, September 

23, 1931 
To Veterans Hospital, 
Boise, Idaho. 

Dear Sir: I'm writing in regards to my husband 
Park Lusk who is in your hospital at present. 

There's one thing I'm afraid he'll not tell you 
about. He's a hopeless drinker. Of course he's 
ashamed of it and says he can quit any time but it's 
a proven fact he can't. 

Now this drinking? I think, is also a result of 
the war or I wouldn't be writing you about it. He 
was a good reliable boy when he entered the service 
and come home a wreck. 

He drank more moderately at first but keeps get- 
ting worse. 

All the nine weeks he was in the hospital in France 
they gave him whiskey to keep him quiet and of 
course they all drank all they could to keep up their 
nerve and now their bodies require it. 

So if there is anything you can do for this please 
do it. The army surely put that craving in him. 
Now they should give him a Keeley cure and take it 
out. 

Yours truly, Mrs. Park Lusk. 



Park Lusk 7Z 

REDIRECT EXAMINATION 

In connection with Park Lusk's work in the field I 
saw him one day when he came in at noon and he had a 
bruise on his elbow. He took a dizzy spell and fell off 
the plow. 

PARK LUSK, the plaintiff in this case, being first 
duly sworn, testified as follows : 

DIRECT EXAMINATION 

My name is Park Lusk. I am the plaintiff. I am 
thirty-seven years old now. If I remember right, I 
weighed 175 or 176 pounds with my clothes on at the 
time I entered the war. I was home on a furlough dur- 
ing my service. At that time I weighed 180 pounds with 
my clothes on. That was April, 1918. At the present 
time I think I weigh 142 pounds. 

"Q. I note plaintiff's exhibit No. 3 is what pur- 
ports to be an examination and included in it is a 
reference to weight and it gives a weight of 148 
pounds or 142 and one-eighth pounds on August 3, 
1917, would that be correct or not? That is about a 
time — the month you entered the service? 

A. What is that ? 

Q. Did you get my question? 

A. No, sir. Not to my knowledge it would be, 
no." 



74 United States of America vs. 

After entering the service, I first went to Camp Lewis, 
Washington, where I remained until the 1st of June, 
1918. I then crossed the continent to New Jersey. I 
can't recall the camp. I remained there six or seven days 
and then went to Liverpool. We left on June 4, 1918, 
and I think we were sixteen days going across. Up to 
the time I landed in Liverpool I had not had any illness 
during the service that I can recall. We then went to 
South Hampton and crossed to Havre. I went into action 
on the morning of September 26, 1918. I was lying in a 
field at 5 o'clock in the morning waiting to go over the 
top. For the two or three weeks preceding that, we were 
in reserve back of the lines, five or six miles from the 
firing line. When I went over the top on that morning 
my clothing was wet and muddy. I was in that condition 
about a week. Just preceding that date we would usually 
try to get under brush to sleep and we ate in the open 
any place. I never had an opportunity to change my 
clothes from the time I was in reserve until I came out 
of the Argonne Forest, I should say close to three weeks. 
During that time it was raining practically all the time. 
It was at the Argonne where I went over the top. The 
warfare there was considered open warfare. I was a 
sergeant over twenty-four men. They handled the ma- 
chine gun carts and ammunition carts. During that time 
the enemy was firing upon me with machine guns and 
artillery. 

'T went over the top on the 26th of September. 

We covered, I guess 9 miles the first day — the 91st 



Park Lusk 75 

Division — and captured around a thousand prisoners the 
first day, but never did know how many got killed. Sev- 
eral of ours got killed the first day. We just kept on 
going and that night we would kind of have details and 
we would change off until everybody got a little sleep. 
It went on that way for the second day and the second 
day we crossed a ravine and there was a hill on each side 
and a canal down in the bottom and we was going down 
the one side — on the side opposite from the lines — and the 
German artillery was headed into the company so we 
run across this canal to get out of that artillery and our 
own artillery hit us and they got about two-thirds of our 
company before we could get away. We were all excited. 
The horses ran away with the machine gun carts and 
ammunition carts and broke everything up, and after the 
artillery fire ceased we had to gather all this stuff up and 
get reinforcements — more men, and more carts. We 
waded that Marne three times and that afternoon went 
on again and continued on through until we got to a 
little town Epinoville that was the first hard battle we had. 
There was a bunch of Germans housed in the old build- 
ings there and we had quite a time taking it and we lost 
several men taking that. We took that town and ad- 
vanced again and went into a big apple orchard on a Sun- 
day — they called it the bloody Sunday — the blood run 
like water. That was along about a week from the time 
we first went over. The timber was thick and we started 
through — it was just like any big patch of timber and be- 
fore we got through it was mowed down like an lucerne 



76 United States of America vs. 

patch by the artillery and machine gun fire. We lost sev- 
eral men there. Along about the 7th of October we had 
more reinforcements. We had I think it was eight or 
nine reinforcements in my platoon and they should have 
been instructed about gas masks before they come in. 
I didn't know they was green, they didn't say anything. 
Well about the 10th of October we run into a gas shell 
and we got word to put on our masks — to pass the word 
back. The first thing I done I got my mask on and look- 
ed to see if the men had masks on their horses. John V. 
Lish come to help me — and what men we had — I was 
helping put one on a horse and the horse throwed his head 
up and knocked my mask off and I got an awful dose of 
gas. It maybe was three or four minutes before I could 
get it back on and I got ten or twelve pretty bad whiffs 
of gas. I got my gas mask back on and turned sick, laid 
down and passed out. I am not sure the time I was down 
but I think forty to fifty minutes. When I come to my 
mask was on all right and I looked around and the rest 
of the men were lying around waiting for it to clear up 
and I felt awful sick and weak. I had pains in my stom- 
ach, my eyes run, my nose hurt. I couldn't get my senses. 
Then a little later my chest started to pain and in an hour 
or two I started to vomit, but I managed to keep my mask 
on my face and I never got very much gas — more gas 
until we went over. Then we advanced on again and keep 
on going and I started to vomit and had dysentery. I 
should say three or four hours if I remember right after 
I was gassed before I had dysentery. I stayed with the 



Park Lusk 77 

company. The Captain wanted me to go to the hospital 
but I didn't want to go for I thought it would wear off 
and I stayed with them and went on vomiting and had this 
dysentery until I got so weak I couldn't go on. We was 
too far away from the ambulance lines for me to walk 
and I rode a horse along with the company a couple of 
hours and finally got cramps so bad and vomiting I could- 
n't stay on the horse and finally rode on the machine gun 
cart until about twelve o'clock that night when I was put 
in an ambulance and put in a field hospital and if I re- 
member I was in the field hospital a week and sent from 
there to a base hospital, where I was nine weeks. They 
gave me a few pills. Nothing else that I know of hap- 
pened." The pills helped the cramps in my stomach. That 
is about all the effect it had on me. I still have dysentery. 
I was still vomiting, my eyes kept running, my nose 
bothered me, and I was still weak." That was just the field 
hospital. The treatment there did not relieve my condi- 
tion. Then I went to the base hospital at Meuse. I don't 
remember the exact date. I think it is pretty accurate 
that I arrived at the field hospital October 14, 1918, and 
was transferred to the base hospital on October 18, 1918, 
and discharged from there December 18, 1918. I was in 
the base hospital about nine weeks. I was still suffering 
from vomiting and dysentery and with my eyes. When 
I reached the base hospital they put me to bed and a few 
hours after I was unconscious. When I came to, I found 
they had moved me into three different wards and I was 
then in the pneumonia ward. When I was conscious, 



78 United States of America vs. 

I was moved on a stretcher. When I came to I had se- 
vere pains in my lungs and my stomach, high fever, head- 
ache and my eyes still run and hurt. At the hospital at 
times the pain in my eyes was relieved. It has not left 
me and I still have it. Not so often and not so bad as it 
was right at first. My eyes still water bad. Before I 
left the base hospital the pains in my chest were pretty 
well gone. They come back whenever I take cold. I 
first noticed that after I left the hospital when I was with 
the company in France before I was discharged. My 
stomach is better than it was when I first came out. I 
don't vomit so often, but I have pneumonia practically 
every winter. The least little cold I get my lungs tighten 
up and I have to doctor it right now or be awful sick. I 
still have attacks at times. 

"Q. Have these pains and suffering been with 
you continuously since the gassing or have they been 
relieved for months at a time or for longer periods 
or any periods since ? 

A. Yes." 
When I got on my feet well enough to leave the hos- 
tital they gave me permission to go back to my company 
and go home. My company was then at Ige, in France. 
1 remained there until about the middle of March, 1919. 
My company was then just taking regular drill work. 
I did not participate in that. I did not perform the duties 
of sergeant during that time or do any work or exercise 
or drill or anything of that nature. From Ige, I went 



Park Lusk 79 

to St. Lazare. I forget how many days we were on the 
hike between those places. I marched with the boys to 
the coast making six or seven miles a day. On that march 
I was sick, my feet troubled me, my stomach was sick 
and I would vomit about every day and it was awful hard 
for me to make the march, but I made it. After six or 
seven days we crossed to Hoboken. During that time I 
went to the company infirmary, what they call ''sick call", 
sometimes every morning for three or four mornings, 
then I would miss a morning or two. We went from Ho- 
boken to Long Island and remained six or seven days. 
I did not perform any duties of a soldier there. I was 
still sick, still vomited, my eyes watered and hurt me. I 
then went to Camp Russell, Wyoming, where I was mus- 
tered out. My condition then was about the same — still 
weak, still vomiting, still had my attacks, my eyes still 
hurt and watered. I was just sick all over, and weak. I 
was at Camp Russell three or four days before being dis- 
charged. At the time of my discharge, I went before a 
physician or medical board. Some questions I answered 
and some I didn't. I did not state to them the condition 
from which I was suffering because I wanted to go home. 
I recall being asked whether or not I was suffering from 
any disability or disease incurred during service and I 
answered that, "No". It was not correct. Then I came 
to Pocatello and then got home, arriving the next day af- 
ter I was discharged. That is, to my parent's ranch in 
Arbon Valley. My brother and I owned it at that time. 
We owned it equal, half and half. The ranch contained 



80 United States of America vs. 

320 acres. My brother and I continued to own that 
ranch in partnership until 1926, I beHeve. From the time 
I arrived home until 1926 I lived with my brother part 
of the time. I was with him for seven or eight months 
after I returned home. Then moved to a little house a 
few hundred feet from his house. My wife and I lived 
there until she died in February, 1922. We lived with 
my brother all summer after I returned until February, 
1920. During the first seven months after my return, 
I took my meals with my brother. At the base hospital 
in France, mornings they would give me a glass full of 
alcohol reduced a little with hot water and sugar, two 
little pills and a dose of castor oil. That was daily, I 
would say, for about five weeks. I got that three times 
a day. After taking such medicine I noticed relief. My 
lungs and chest would loosen and it would kill the pains 
in my stomach. I had medical treatment from the time 
I was back with my company and preceding my discharge 
from the army. They consisted of the same thing. I 
got the liquor or alcohol from the medical department and 
other medicine also. I continued taking these medicines 
all the while I was in France. 

I know a doctor named Charles Sprague. I contacted 
him about 1924, He gave me an examination lasting 
from six to ten minutes. I gave him a history of my 
difficulties and he discussed it with me. I did not make 
the remark to him that I had worked every day since dis- 
charge and lost no time. I didn't work continuously up 
to the time I had that examination. The first twelve 



Park Liisk 81 

months after I came home, I put in very little time in 
actual work. I would likely work part of the time and 
part of the time did not. After Dr. Sprague, I consulted 
Dr. Groom, about 1925, I believe. He examined me and 
prescribed for me. I have taken some medicine under 
his direction. I don't remember the name of it, but he 
said it would relieve the pains I have in my stomach and 
chest. I have had that prescription filled on other occa- 
sions. I am still taking it. I have had no other treat- 
ments from any physician or other source. I have taken 
several home remedies that my mother used when I was 
a kid. I get constipated and I take salts and when my 
lungs choke up and I get those pains, I take mustard poul- 
tices. My wife first applied them and when I was living 
with my sister-in-law, she did. Mustard plasters were 
applied steadily all winter every winter. If a damp spell 
comes on through the summer or fall or spring, I would 
use them then too. I would use mustard plasters for pains 
in my lungs, back and front. I think that covers every- 
thing. I was in a hospital for examination about two 
years ago, after I filed this action. After I returned 
home, I went to my brother's place and remained there 
until February, 1920. As near as I can remember, the 
first four or five weeks after I came home, I did nothing. 
I was in a weakened condition. There was work I should 
have done. I tried to do it. I went out and helped with 
the chores. I tried to do a few other things, but couldn't 
stay with it. I laid around the house and my brother told 



82 United States of America vs. 

me to stay there, to rest, that he and his wife could han- 
dle the chores. I tried to milk cows. Some mornings I 
could keep on the job and some mornings, I couldn't. 
I would have severe vomiting spells and pain in my stom- 
ach and have to quit. I would go to the house. My bro- 
ther and his wife and my wife would complete the work. 
I tried to help with the haying a little. I mowed. I did- 
n't continue until the work was completed because I would 
get those gas pains in my stomach and it would start me 
vomiting and I would be so weak I couldn't sit on the 
mower. I had pains in my head, my eyes hurt me a lot, 
I hired a man to help him out. On that occasion, I would 
go to the house and lie down. That first year I don't be- 
lieve I ever worked a full day on the haying job. After 
haying, I tried to plow when the summer fallowing start- 
ed. I had eight horses and a plow. I tried to plow off 
and on all through the season. The dust would get in 
my throat and lungs and choke me up and my eyes would 
run until I couldn't see and I would take those vomiting 
spells and coughing. Then sometimes I would sit down 
until those things cleared up and I would try to work 
again. I would sit down twenty minutes to a half hour. 
Sometimes that would happen four times during the 
working day. I did not continue that work one day after 
another until it was finished. I don't think I ever did 
work two days straight. It would be days and half days. 
I would quit and not work at all because I was so weak I 
couldn't work. There were times in the mornings I 



Park Lusk 83 

couldn't go out. After I vomited I would still have those 
gas pains and my brother would go out and take the team 
and I would stay in the house. A little liquor usually 
helped me. It stopped the pain and checked the vomiting. 
After that plowing, I tried haying, then harrowing. I 
did not try to harrow that year, then operating a com- 
bine. I started out driving. A man named Hatley work- 
ed with me. I did everything before I went to the war, 
driving and sewing sacks and all. The first fall I did not 
try to handle sacks on the combine. The work on the 
combine continued about twenty days. I did not work 
every day. I think I put in four or five days, maybe, six 
days on the harvester. I quit because I got so sick and 
choked up so bad, I couldn't work. The dust caused me 
to choke. I would start coughing and my voice would 
get down to a whisper. I would get ofT the machine, 
cough and usually vomit. I did not do anything when I 
laid off because I felt more like laying down than mov- 
ing. My voice would clear up and I would get better and 
I wouldn't choke up so bad. My eyes, would clear up and 
wouldn't run and the pain was not so bad. Then I went 
to the Canyon after wood, maybe four days that fall. I 
usually rode a horse and snaked the wood out to the wa- 
gon working a little better than half a day. I tried to 
help chop and I didn't have the wind to use an axe. I 
could only chop about half a minute. I tried that on nu- 
merous occasions. In the Canyon, I helped load the wood. 
It would gripe my stomach every time I would get hold 



84 United States of America vs. 

of a stick and there would be pains in my stomach and 
chest. 

I did some drilHng, continuing, I guess, four or five 
days. There was some dust and I choked up and got 
pains in my chest and my eyes would water and pain and 
burn. My brother told me to lie down and he did the 
drilling. In connection with that drill work I did handle 
sacks of grain. When I drilled, I always had my brother 
split the sacks for me, that is, put the grain in half sacks, 
because it hurt me to life a full sack. I usually vomited 
if I strained any. Before the war, I handled full sacks 
in drilling. Since then I have never handled full sacks. 
The first year I did not treat any grain for seeding. We 
use a formaldehyde and vitrol solution to so many gallons 
of water, and put it in a 50-gallon barrel and we dip the 
wheat in this and draw it up, drain it off, and put it in 
the wagon. Ever since the first year I have treated grain. 
I split the sack in half and use a stretcher to lift it with. 
My wife has helped me a lot, drawing the sack out when 
I was not feeling good. I went back to the drilling, off 
and on, after I felt better. It required 15 or 16 days to do 
the drilling. During that time I think five or six days 
would be all I put in. Following that, besides the chores, 
we had to cut the wood. My brother did all that. I did 
not help because it hurt me to swing an axe. I don't think 
there was any other work I undertook that year. Spring 
work started the fore part of April. Then we fix fences, 
then do the ditching, then start summer fallowing, then 



Park Liisk 85 

harrowing follows the plowing, some years you have to 
weed the land, then comes haying and harvesting, then 
drilling and Canyon work. On the first ranch we had 
about 35 or 40 acres of hay land under irrigation and the 
balance was grazing and dry farming, some waste. Since 
we entered the partnership we have not had any irrigated 
land. In the spring I would do some fence work. My 
brother would usually be with me. I did not do as much 
work as he because I felt weak most of the time. He 
dug the fence post holes and set the posts and I carried 
the hammer and staples and tacked the wire. That would 
take about a day. As to the plowing, we used to divide 
that up as near as we could. We plowed together. I did 
not continue throughout the season because I would get 
choked up with dust and pains in my chest and my eyes 
would water so I couldn't see. I would quit for a day or 
two and he would put his boy on the plow or hire a man. 
We used a team and scraper to clean the ditch. I usually 
drove the team and he hired a man or did the scraper 
work. That averaged about two days. I never did any 
harrowing because there was more or less dust and it 
seemed like it hurt me worse than anything else. I ran the 
weeder and did not complete the job because the dust was 
so bad ; some days when the wind was right I would have 
to quit. My brother would usually complete it. I would go 
to the house and would likely work around, patching up 
fences, tacking wire where it was loose. I drove the horses 
on the combine and my brother sewed the sacks. Some- 



86 United States of America vs. 

times he hired a man. The later years I have started 
with it pretty well, but there was days I couldn't go on. 
1920 was about the same as 1919. 1921 I stayed with it 
better, but not every day because with a tail wind the dust 
would choke me until I had to quit. In connection with 
the drilling in 1920, and in succeeding years I would 
help a little, but not one day after another. The Canyon 
work is the same every year. My vomiting isn't near 
as bad as it was the first two years I came home. I think 
my eyes are worse. I still have trouble with my lungs. 
They are about the same. My eyes are getting worse. 
The work I have explained during 1920 is about the same 
through the years. 

When I moved from that ranch, I sold to my brother 
and bought a dry farm three quarters of a mile east. I 
still have the place. Now I am leasing it. I never had 
title to it. I had an equity in the place for seven or eight 
years. It was 160 acre ranch. When I left my brother 
I bought another 80 acre piece. I did not pay for it. I 
never did acquire title to it. When I got it it had about 
twenty acres in crop and 20 acres in summer fallow. I 
operated this place the same as the others and attempted 
the various tasks. When I lived with my brother, my 
boy was nine years old and I think my wife's daughter 
was 12 or 13. After I first left my brother's place, I 
tried to do plowing, but did not continue. The result 
was the same as on other occasions. Sometimes I would 
take coughing spells and start vomiting, and other days 



Park Litsk 87 

the wind would be so it would sweep the dust on me and 
it would choke me up. The girl and boy would do some 
of the work. The boy drove the horses and the girl han- 
dled the levers when necessary. I think they plowed four 
or five days that season. The total time required to do the 
plowing was about fourteen or fifteen days. My boy did 
the harrowing. I tried it a few times. The dust would 
choke me up. I could usually go a half day before I 
would get choked up, and have to quit. I would have 
pains in my chest, difficult for me to breath and my eyes 
would water worse. I had someone to sew sacks and I 
would drive during harvesting. It always hurt me to left 
sacks, causing me pains in my stomach. Lots of times 
I would get dizzy and everything would go black and I 
would keel over. * 

"Q. How often yould these dizzy spells occur? 

A. Every time I exerted myself they hurt. 

Q. What do you mean, exerted yourself — what 
kind of work would bring them on — any other work ? 

A. The dizzy spells come only at times when I am 
not doing anything but just sitting around. 

Q. You say things turn black ? 

A. Yes, sir. 

Q. So far as you could notice it and its effect 
upon you, was it any different from your fainting or 



88 United States of America vs. 

becoming unconscious in France in the hospital when 
you were out those four days? 

A. I pass out about the same way, but I don't 
stay out so long." 

These conditions were about the same every year, but 
there were some years if there wasn't too much dust I 
could work more. I believe I worked on road work for 
eight or nine years. I would say it would average five 
or six days a year. 

"Q. Did you do that work steady one day after 
another ? 

A. Yes, while I was on I did. 

Q. How was that? 

A. While I was on, I did. 

Q. On other work other than this five or six 
days, did you ever work any longer periods? 

A. Yes, sir. 

Q. On more than one occasion ? 

A. Yes, sir. I think on two occasions. 

Q. What types of work were you doing then? 

A. Following the scraper — driving a team. 

Q. Did you handle the scraper? 

A. No, sir." 



Park Lusk 89 

I did not work at that steady one day after another. 
There would be mornings when I would take to vomiting 
and was too weak. I usually took the team down. There 
was most always a man around I could hire to drive my 
team. It was close to a school house and the boys would 
come down and drive until quitting time. That would 
happen almost every day and the boys would come down 
after school on Saturdays. The longest time I was on 
that job was thirty days. That was a gravel job, I think, 
four years ago. My feet gave out on me quite a lot. 
Whenever I hired a man for the day, I usually went home 
and just laid around. Felt weak sometimes and have that 
griping in my stomach and pains in my chest and lungs. 
That is the only outside work I did. I did not do this 
type of farm work and this road work every year since 
the service. 

"What years were there changes? 

A. I think it was the third year after I came 
home before I worked on the road. 

Q. Before you began doing road work? 

A. Yes." 

"Q. How about meals and appetite and diet — did 
you eat regularly ? 

A. Yes, I was at the table three times a day. 

Q. Did you eat a meal ? 

A. Sometimes I did. 



90 United States of America vs. 

Q. What food did you eat? 

A. Sometimes drank a cup of coffee and quit. 

Q. Other times what did you do? 

A. I would take a meal." 

I have lived on a diet of bread and milk for supper ever 
since I came home from the army. My brother told me 
to do it and I could always rest better when I had bread 
and milk instead of a hot supper. In France, at times, 
the drinking water was plumb rotten. It had a nasty 
taste, was stale. The food was irregular. When we 
first went over the top we had two packages of hard tack 
and a can of horse meat. They figured that was two 
days' rations, and we lived five days on it. The gas on 
October 10th was not dark and we could see it. It would 
raise from the hole where the shell was in a dense cloud. 
We could see it two or three minutes, then it would evap- 
orate. When I came home my right hand had a little cut 
caused by a piece of shrapnel. I got that in the Argonne 
Forest. I also had burns on my skin. Pretty well healed 
before I left the hospital. There are evidences of that 
burning now on my back and chest and a few on my 
arms. About four weeks after I went to the hospital I 
got to rubbing my leg one day and the top skin all came 
off and I kept digging away until I could take my thumb 
and just get a whole gob of dry skin. That continued 
about a week before it all came off. 



Park Lusk 91 

CROSS EXAMINATION 

They weighed me when I was examined for army ser- 
vice. I don't remember what they put down. At that 
time I weighed 175 or 176 pounds with my clothes on. 

''A. I am reading from Plaintiff's Exhibit No. 
3, physical examination by examining physician of 
the local board — weight 142 and 1/8 pounds. 

A. I haven't weighed that light since I was fif- 
teen years old." 

The weight they put down, I think, is wrong. I now 
weigh 143 or 144 pounds. I haven't weighed for two or 
three months. Then I think it was around 144. In 1922, 
when Dr. Sprague examined me I think I weighed about 
the same then as now. 

I have lost weight since I came out of the army if my 
weight now and in 1922 was about the same as when I 
came out. I got on the ship on July 4, 1918, and we were 
sixteen days going across to Liverpool. We got the first 
action on September 26, 1918, and prior to that we had 
been in different places in France taking machine gun 
practice. I was a sergeant at that time. I went to a ser- 
geant's school back of the lines. I took the regular train- 
ing in applying gas masks and went through all the train- 
ing of a regular soldier. To my knowledge no soldier 
was permitted to go into action without knowing exactly 
how to apply his gas mask. He shouldn't go up unless 
he knew that stuff. As sergeant I inspected my men. I 



92 United States of America vs. 

don't remember, but it took some seconds to apply a gas 
mask after warning — about six seconds. The gas mask 
was buckled on and hung from a long tube. When the 
horse knocked my gas mask off, I was excited and put 
it back on as soon as I could. It was three or four min- 
utes. The horse was rearing around and I couldn't get 
to the gas mask. I tied the one on the horse, and put 
on the mask. It was my duty to see the horses got their 
masks on as well as the men. When the gas came, I be- 
lieve it had quit raining at that time. It was warm, but 
it got cold at nights. It was in the evening just at dusk 
we got the warning. You could see about 200 or 300 
yards. I don't know for sure just what kind of gas it 
was, but I could smell it. The gas barrage lasted close 
to an hour before they gave orders to march on. We 
were in reserve. This was open warfare. Our first or- 
ders there were to advance. I wouldn't go to the hospital 
immediately after I was gassed. I stayed with the com- 
pany. I was not all of the time in command of the pla- 
toon of twenty-four men. The last day or two they put 
another man in charge of the platoon and I rode a horse 
as long as I could ride and then rode the machine gun 
cart. I stayed with the company maybe two days after 
I was gassed. The gas turned me sick at first then every- 
thing went black and I went unconscious. I reported to 
the commanding officer who said he would get me to a field 
hopsital. I don't remember the date. It was two or three 
days after I was gassed. I was there five or six days, 



Park Lusk 93 

if I remember right. I had dysentery and was vomiting. 
It was all at the same time. Diarrhea and dysentery 
mean the same thing. If my service record shows that I 
had diarrhea, as far as I know it would be right. After 
about four or five days in the field hospital, I went to the 
base hospital, I don't remember the dates. The hospital 
diagnosed my condition, gas attack, gas stomach, poison 
stomach. 

"Q. I am reading from plaintiff's exhibit No. 3 
the service record : Soldiers name : Park Lusk ; Ser- 
geant Co. A, 347th machine gun batallion, October 
14, 1918; cause of admission, diarrhea acute; dispo- 
sition, transferred to Meszes, October 18, 1918 to 
E. H. 16. There the diagnosis was diarrhea. Oct. 
19, 1918, transferred to base hospital No. 89. You 
had pneumonia while you were there? 

A. Yes, sir. 

Q. This is given as pneumonia and diarrhea af- 
ter you entered the hospital October 16, 1918. 

A. At the base hospital. 

Q. When did you return to duty? 

A. Sometimes in December but I don't remember 
the date. 

Q. December 18 isn't it that you returned to 
duty? 

A. Somewhere about there. 



94 United States of America vs. 

Q. What other complaint did you have the hos- 
pital care for after that? 

A. I used to report on sick call after I got back. 

Q. On February 11, 1919 did you receive some 
treatment ? 

A. From the Company hospital? 

Q. It says Feb. 8, 1918 source of admission, com- 
mand scabies; in line of duty — yes; disposition, re- 
turned to duty Feb. 9, 1919. 

After I returned to duty on December 1918, I did 
nothing. I did not resume command of my platoon, which 
was drilling. I was then at Ige doing nothing, prepara- 
tory to being shipped home. I was discharged May 8 
or 9, 1919, and since then have had melical attention with 
Dr. Groom. At the time I didn't tell him my trouble and 
he examined me and gave me a little medicine for relief. 
The medicine that he gave me was a glass of alcohol every 
morning, noon and night, diluted with hot water. It 
was enough so I could taste it a lot. I know how alcohol 
tastes. I got the prescription from Dr. Groom, I think 
in 1925. I am not sure what it was. I told Dr. Groom 
how I felt and he gave it to me. I have kept it all these 
years. I have it with me now. I don't know if it has 
alcohol in it. Dr. Groom gave me a thorough examina- 
tion two years ago in October, I think. It was in the 
fall. It was during the Canyon work, or just before that. 
The time Dr. Groom examined me, I hadn't been doing 



Park Lusk 95 

any work for some time. I just came back from the Vet- 
erans' hospital. At that time he asked me if I was get- 
ting reHef from his medicine and wanted to know if I 
was still taking it and said if I got relief to keep on with 
it and he gave me a thorough examination, stripped me 
down and examined me. I told him I had a bad stomach, 
about my vomiting, and my lungs giving me lots of trou- 
ble and the pain and how I choked up with pneumonia. 
I told him about my eyes and feet and everything that was 
wrong with me. 

At this point defendant's Exhibit No. 5, being claim 
for compensation on form 526 was handed witness who 
acknowledged his signature on the Exhibit. 

I got shrapnel wound I spoke of in the Argonne For- 
est. I was treated for it. It was only a little bit of a 
scab and it festered. I received that before October 10. 
It is on my knuckle here. They put iodine on it. They 
called it a scratch, but it had infection in it. It was an 
open wound in May, 1919. Just a scratch. At this point 
defendant's Exhibit No. 5 was admitted over the plain- 
tiff's objection. Defendant's Exhibit No. 6, also an ap- 
plication for compensation, was offered in evidence at 
this point. Exhibit No. 5 was then read, as follows : 

''This is an application for compensation of veter- 
an disabled in the world war, on U. S. Veterans Bu- 
reau form 526. Under what name did you serve in 
the world war ? Park Lusk. Date of entering ser- 
vice Sept. 18, 1917. Place of entry, American Falls, 



96 United States of America vs. 

Idaho. Date of discharge May 9, 1919. Company 
and regiment or organization, vessel on which, or 
station in which you served during the world war. 
A. Co. A 347 Machine gun. Rank or rating at 
time of discharge? A. Sergeant. Nature of dis- 
charge. A. Honorable. Nature of disability claim- 
ed — teeth. Date disability began, Spring of 1918. 

Signed and sworn to at Pocatello October 23, 1922." 
At this point defendant's Exhibit No. 5 was admitted 
over plaintiff's objection and the following was read 
therefrom : 

"Bureau form 526. Filed April 6, 1930. Among 
other things it says give the names of physicians who 
have treated you. I am reading from No. 6. If you 
received treatment while in the service give the name, 
number or location of the hospital, first-aid station, 
dressing station, or infirmary, or the organization 
to which it was attached, the dates of treatment and 
the nature of sickness. His reply was Mease Hos- 
pital Center, France, 9 weeks — in bed 7 weeks." 

The thorough examination given me by Dr. Groom 
was two years ago, was in October, 1931, as near as I 
can remember. At this point, Defendant's Exhibit No. 
7 and 8, being claims for insurance made by the witness, 
he having admitted his signature on bond, were offered 
and admitted in evidence without objection. 



Park Lusk 97 

"Mr. Slaughter: (Reading) Received Septem- 
ber 5, 1931. Sworn to the 2nd day of September 
1931. I, Park Lusk, believe myself to be entitled to 
receive the monthly payments of insurance granted 
by the United States to me under certificate or policy 
number blank on account of permanent total disabili- 
ty resulting from poison gas, shell shock and expos- 
ure. Date disability began about November 1, 1918; 
cause of disability sight of left eye, feet and stomach. 
Names of physicians who have attended you since 
disability began and the answer is none. I will now 
read from the other exhibit on form 569, claim for 
insurance, received July 2, 1931. Date disabihty 
began, November 1, 1918; cause of disability, left 
eye, stomach bad and feet. Where received, Ar- 
gonne Forest. 

Q. Did — does that bear your signature ? A. Yes, 
sir. 

Q. Did you sign it? 

A. It looks like my signature as near as I can see. 

MR. LAMPERT : I object to that because 
it very clearly shows itself to be a document 
made by others than the witness, containing 
many matters that the witness thus far has not 
disclosed any knowledge of. 

MR. SLAUGHTER : I hadn't offered it yet but 
I will offer it now. 



98 United States of America vs. 

MR. LAMPERT : I will renew the objec- 
tion. 

THE COURT: Overruled. Admitted. 

MR. LAMPERT: Exception, your Hon- 
or." 
When I was in the hospital at Boise for examination 
in 1931, I believe I told the doctors who examined me 
pretty well all of my complaints. Not about the shrapnel 
wound. I told him the main things. I didn't know there 
was any use to go into all of them. I wanted to know 
what was the matter with me and to cooperate with the 
government doctors. I think I went through everything 
that was most important. I went over to Boise after fil- 
ing this suit. When I was up for discharge at Camp D. 
A. Russell in 1919, I told them I was all right. That was 
not true. 

"Q. Why didn't you tell the truth? 

A Because I didn't want to be held there. 

Q. You didn't tell them about being gassed ? 

A. No, sir. 

Q. You didn't tell them about the shrapnel 
wound? 

A. No, sir. 

Q. Or about the skin slipping off on your legs? 

A. No. 



Park Lusk 99 

Q. You didn't tell them anything, did you? 

A. I figured I was a well man and wanted to go 
home. 

Q. And didn't you find you were a well man? 

A. No. 

Q. What were your complaints ? 

A. 'Still my stomach, feet, eyes and chest." 
I was not entirely on a milk diet before discharge from 
the army. I used to go over to the mess kitchen and get 
a glass of milk and a piece of bread and nobody knew 
that, but me and him. 

"Q. Is that your signature? 
A. It looks Hke it. 

Q. This is Exhibit No. 3. The question put to 
you was have you any reason to believe that at the 
present time you are suffering from the effects of 
any wound, injury or disease or that you have any 
disability or impairment of health, whether or not 
incurred in the military service. Your answer was 
no. Is that your signature? 

A. Those two don't look alike. 

Q. Can you make out whether or not you signed 
it? 

A. Yes, I expect I did. 



100 United States of America vs. 

Q. Reading from Exhibit No. 3. Statement of 
person examined. Have you found that your health 
and habits in any way interfered with your success 
in civil life ? Answer no Do you consider that you 
are now sound and well, if not state details. Yes 
except that I'm hoarse frequently. Have you ever 
been under treatment in a hospital or asylum, if so, 
for what ailment and you replied no. Signed Park 
Lusk Richard F. Noth M. D. Examining physician. 
This is dated October 17, 1917, the time of his en- 
listment." 

''MR. SLAUGHTER: Reading further from 
the declaration of the soldier Exhibit No. 3. 

This is a report of the physical examination of 
the enlisted man prior to his separation from the 
United States Army. Certificate of immediate com- 
manding officer. I certify that aside from his own 
statement, I do not know, nor have any reason to 
believe, that the soldier who made and signed the 
foregoing declaration has a wound, injury or disease 
at the present time, whether or not incurred in the 
military service of the United States. In my opin- 
ion the wound, injury or disease did not originate in 
line of duty in the military service of the United 
States. Under remarks there is nothing. Signed 
James B. Lowrey, Second Lieutenant, 21st Infan- 
try, May 6, 1919." 

I was married at Pocatello in April, 1918, while home 



Park Lusk 101 

on a furlough from Camp Lewis When discharged in 
May 1919 I returned to the ranch at Arbon Valley. My 
wife was living there at that time. For the first seven or 
eight months we lived with my brother's family. We 
bought that farm in 1914, I think. Some was paid for. 
While I was overseas, my wife stayed with her mother 
and father. For four or five weeks after I came home 
in May, I did practically nothing. My brother was plow- 
ing, when I came home. I helped just what I could. In 
haying I mowed a little. The first cutting of hay started 
the last of June and the wild hay the latter part of July, 
and the second cutting along the first of September. My 
wife and I moved to a separate house in February, 1920. 
It was on the same ranch. I helped a little during the 
harvest season that fall driving a combine some. There 
were eight horses on the combine. There were, I don't 
remember — sixteen or seventeen days in the harvest that 
fall. The crop was awful light that year. I believe I 
harvested 320 acres. Some days I drove all day long 
and other days I would have to stop twenty minutes or so 
and rest sometimes. About once in the morning and once 
in the afternoon, something like that — sometimes twice 
every half day. Uusually once in the morning and once 
in the afternoon. Getting wood from the Canyon would 
take about a week or ten days. We would just go when 
it was convenient. There was no definite time, just so 
we got the wood out before snow fell. It was not neces- 
sary to hurry there at a task like that. I don't feel I took 
much part in it. The wood was not logs. It was quak- 



102 United States of America vs. 

ing asp. Some was heavy. It wasn't bad. The fall of 
1919, my brother and I harvested the wheat crop togeth- 
er. I had a hired man. He sewed sacks while I was on 
the machine. I think he drove after Dave went on the 
machine. My brother sewed the sacks after he went on. 
My brother and I operated as partners on that ranch 
from 1920 to and including 1926 on a 50-50 basis. My 
brother and I did the plowing with the hired man. I didn't 
do my shart of the plowing. During nine years my 
brother was away some — he was just highway commis- 
sioner. My brother, the hired man and I, between the 
three of us, the work got done. The hired man was not 
there only during the plowing season. 

"Q. Did you hear your brother testify that he 
had a hired man only during the spring time ? 

A. He used to keep a man on the ditch." 

My brother and I had 30 or 40 acres of irrigated land on 
that ranch. There was not a great deal of ditching to do. 
When they used a scraper, I helped drive the team and 
if it took two days I would drive the team throughout the 
time. Weeding on the dry farm all depends on the sea- 
son. If it is a wet season they are a lot of trouble. Some 
seasons we would not have much weeding. During the 
haying season, I drove the mower some, not steady. 

"Q. The dust wasn't so bad when you would be 
driving the mower so you could do that kind of work 
better than the harrowing? 



Park Lusk 103 

A. As far as my choking was concerned, I could." 
The hired man's wages came out of both of our profits. 
He was hired between us During the nine years my 
brother was road commissioner I think I put in a httle 
time every year working on the roads. Something Hke 
five, six or seven days. On one occasion, it possibly last- 
ed thirty days. I think that was four years ago in 1929. 
On that occasion we had four teams on the road. I was 
paid so much per hour per team and I got 40 cents per 
hour. I was paid for 8 or 9 hours a day. I would have 
to stop and rest occasionally when driving a team. Some 
days I would go all day without stopping. My brother 
bought my interest in the farm, I think it was 1926. I 
was married the second time in October, 1927. In Au- 
gust and September, 1927, I was working in the harvest 
running a combine harvesting grain and working for my 
present wife. I got paid $2.00 a day and 50 cents a day 
for each horse. There were eight horses. I drove them. 
The number of hours a day I worked varied. Some days 
we would get in eight hours, other days only six. 

"Q. Did you carry that job through until you 
finished it ? 

A. Yes, sir." 

I believe that took around two weeks. I had a crop 
of my own that fall and would drive the combine during 
that harvest. That took something like sixteen days. I 
drove the combine throughout the harvest and perhaps 
would have to rest twenty minutes some mornings when 



104 United States of America vs. 

the dust was bad and maybe in the afternoon when the 
dust got bad. After we were married in 1927 we moved 
to a httle house near the school house. In 1928 when 
the crops were put in I Hved in the Crystal District on 
the property that belonged to a man from California. 
My wife owned a ranch there. From 1928 I have farmed 
the two ranches, each consisting of about 160 acres. I 
would have about 140 acres in wheat, one spring planting 
one ranch and the next year planting the other. 

"Q. You would do nearly all the plowing there 
was to do ? 

A. Yes." 

I didn't harrow much. I didn't have much weeding to 
do only when it was a rainy season. I had no hay. It 
would take about two weeks to harvest the 140 acres of 
wheat. I would drive the combine and teams. One of 
the places is pretty steep and when I would get on the 
steep part I would put on more horses. 

"Q. Every fall then since 1928 you have been 
driving a combine with very few interruptions ex- 
cept just now and then to rest ? 

A. Yes." 

I use my own horses. I have seven head now. 

'THE COURT : I will overrule the objec- 
tion Exhibit 9 at this time." 

At this point the witness admitted his signature to Ex- 



Park Lusk 105 

hibit 9 and that the handwriting part looks like his writ- 
ing. 

"Q. I will read from this. To the patient : List 
in the spaces below the name and addresses of your 
employer, the kind of work done, the time of employ- 
ment, and the salary received, beginning with the 
first employment after leaving the service, and in- 
cluding to the present time. Please write clearly 
or print. Working for myself, farming since ser- 
vice. I make a fair living. List the names and ad- 
dresses of all the hospitals private and government, 
you have been in since leaving the service, and the 
time which you spent in each. Answer none. Sign- 
ed Park Lusk, dated September 21, 1931." 

REDIRECT EXAMINATION 

Exhibit No. 9 uses the phrase, "fair hving." I did not 
make a living for myself and family throughout those 
years. As to how I secured our living, I don't know how 
to answer that unless I would say from the help of others 
along with my own. To explain what I meant by very 
little interruption as to plowing and combine work, in 
harvest season a machine should go straight through and 
not stop. There were small stops and some mornings I 
was the last getting to work. I would get to coughing 
as soon as I had breakfast. I was never in a hospital 
other than the Veterans' Bureau at Boise. As I remem- 
ber, I went to see Dr. D. C. Ray at his office here in town 



106 United States of America vs. 

and he was out and Dr. Groom was in and I talked to him 
in place of Dr. Ray. At that time, I still had my trouble 
with my stomach and chest. 

RECROSS EXAMINATION 

I think it was in 1925 that I went to Dr. Ray and had 
Dr. Groom. 

ED ENGLAND, a witness on behalf of the plaintiff, 
being first duly sworn, testified as follows : 

DIRECT EXAMINATION 

My name is Ed England. I live at Arbon, Idaho. I 
am a farmer. I know the plaintiff and got acquainted 
with him, I think, in 1914. I live close, a mile or so away. 
I saw him shortly before he left for the army. He came 
back on a furlough not very long after he left. I saw 
him shortly after his discharge from the army. I noticed 
a change. He was quite a little thinner, lighter, when he 
came home and he seemed to be coughing somewhat and 
his eyes were red and inflamed. That covers it pretty 
well, I believe. Before he went away he used to come out 
to the ball games and go to dances and after he came back 
he didn't go to any of them. Didn't seem to move like — 

CROSS EXAMINATION 

I saw the plaintiff a short time before he went into the 
service, probably the day he left. I certainly do know 
the day he left. I was in the Valley when he went away. 



Park Lusk 107 

I didn't see him when he went. I saw him shortly after 
his discharge. That was when he came home to the Val- 
ley. I don't know when he was discharged. I never saw 
him weighed. I would judge he weighed 140 or 145 
pounds after his discharge and I should say he weighed 
165 pounds prior to his service. If he weighed something 
like 142 1/8 pounds up in front of the draft board, I don't 
know that there was a substantial change in his condi- 
tion. I don't know that there was a substantial change 
in his condition between the time he left and the time he 
came back. 

ELLIS KACKLEY, a witness on behalf of the plain- 
tiff, being first duly sworn, on oath testified as follows : 

DIRECT EXAMINATION 

My name is Ellis Kackley. I reside at Soda Springs, 
Idaho. I am a physician. I have practiced 36 years. 
I am admitted to practice in Idaho, where I have practiced 
all that time. I was in the military service during the 
war, engaged in active warfare in France. I was assign- 
ed to the duties of a surgeon in the military service and 
served in that capacity in France. I was in front line 
service under fire. While on the front line I had occasion 
to see and take care of men who had been gassed in war- 
fare. Quite a number. I administered more than first 
aid, which was all you were supposed to give, but when 
they fell in line you had to hold the patient there until 
you were able to send him back by ambulance. I was 



108 United States of America vs. 

engaged in that service in taking care of such cases Oct. 
10, 1918, in the Argonne Forest. The poison gas used 
there by the Germans had two effects, an internal effect 
and a surface effect. If it struck the surface, it was very 
irritating to the skin and if you inhaled it, it was destruct- 
ive to the lung tissue. Some gasses would make you sick 
to your stomach and a good deal of it was irritating to 
the eyes. If it struck the surface of the body, if you 
were wounded and dropped into a shell hole, it would 
burn the skin until it would sluff off and if you inhaled 
it it would be destructive to the air passages and would 
make the eyes sore. It would first destroy the mucous 
lining and if it got into the air cells in the lungs, it would 
destroy them. I know of mustard gas. If it strikes the 
surface, it will irritate. If just a little, it will make the 
surface red and itchy and sore, and if it is in contact very 
long the skin will sluff off as in an ordinary fire burn. 
If the gas is very severe on the surface of the body it will 
blacken and break it down and it will sluff and peel off 
and really looks just about the same as a fire burn. In- 
haling it is different entirely. It is very destructive to 
the lungs. The first thing would be a congestion, a feel- 
ing of impending death, like you couldn't get your breath. 
The symptoms or indications that can be observed by or- 
dinary people are coughing, vomiting, the cough is prob- 
ably one of the first. Any place the gas comes into con- 
tact with, the eyes, stomach or lungs, it will have an ef- 
fect. It would be pretty hard to get it in the stomach ex- 
cept through food and drink. That would be probably 



Park Lusk 109 

the only way you could get enough in the stomach to do 
any harm. The disease or diseases which follow within 
a week or two or three after gassing are the stomach is 
irritated, the eyes are very sore and the lungs seem like 
they are not able to get enough air in them. Patients 
complain of lack of air. It seems like the air tubes are 
so congested that they are closed. We generally gave 
morphine to sooth the patient, but that wasn't the im- 
mediate treatment. If they were badly burned — well on 
the front, we were very limited to drugs and generally 
gave whiskey or morphine. That was all we had to give 
in the American army. In the French army we didn't 
have alcohol, but we would give them wine. 

"Q. How much alcohol or wine did you admin- 
ister per day? 

A. With a Frenchman — you couldn't hurt him 
any, you didn't — he got a lot but an American you 
would give one or two ounces of alcohol." 

That would be two or three or four table spoons full. You 
would have to put some water in it for very few men 
could drink the straight alcohol. 

I have been recently called upon to examine the plain- 
tiff. I did not know the man and I had not seen him be- 
fore that. I know nothing of the history of his case 
except what I heard here in court. My findings in the 
first place is chest seems to be sunken in and there are 
rales in both lungs and the expansion is imperfect — bi- 



110 United States of America vs. 

lateral as much on one side as the other. There are rales 
and dullness in the lungs. Upon those findings I was able 
to make a diagnosis. The lung was impaired. Limiting 
it to my findings and my examination, without any his- 
tory, I found dullness and rales and an inability to ex- 
pand the chest and a flatness in the chest. 

"Q. Would it aid you any by exposure of the 
chest so you might illustrate the things you found ? 

MR. SLAUGHTER: Objected to as in- 
competent and prejudicial. 

Q. I asked if it would aid him to illustrate and 
make clear his findings and if so — 

THE COURT : He can answer that yes or 
no. 

Q. Would it aid you ? 

A. I think it would. 

Q. Now^ we should like to ask that the plaintiff 
be stripped and that he have an opportunity to give 
that explanation of his findings. 

MR. SLAUGHTER: Objected to as in- 
competent and prejudicial. 

THE COURT: Overruled. 

MR. SLAUGHTER: Exception, please. 

THE COURT: It is understood— or do I 
understand you examined this plaintiff and 
found one side of his chest sunken in ? 



Park Liisk 111 

A. No, it is bilateral. 

MR. LAMPERT : Step up there Mr. Lusk. Turn 
him around so the jury can see and the Court. This 
is caved in or flattened — put it in your own words 
now. 

A. The chest over the lung here shows the lungs 
— you don't see the lungs because they are back in 
the thoracic cavity^ but you can see the chest wall if 
flattened and it is flattened in here making a rounded 
condition. There are the marks of the gas here on 
his back, or irritation. I don't know whether I should 
say gas, but here's the scars anyway. You can all 
see the scars. 

Q. Anything else you wish to show ? 

A. In percussing the lung it has a dead sound. 
That has a dull sound. These are the apices of the 
lungs — that is both.. lungs and they seem to be dull. 
Here is the great area of the lung. There is a dull 
place but that ought to be for that is his heart. There 
is a fair area of good lung here. These are scars. 
I don't know what made them but they are scars and 
they look like the scars I find from mustard gas." 

Yes, the history of the disease and of conditions are 
of some importance to a medical man in arriving at the 
ultimate diagnosis, in determining a disease. 

"Q. Then in addition to your findings, based 
upon your examination and the conditions as you 



112 United States of America vs. 

have found them, I will give to you certain facts 
which you may assume to be facts, as to the history 
in the case, and I will ask you first to consider as 
the definition of total and permanent disability the 
following: Total disability is any impairment of 
mind or body which renders it impossible for the 
disabled person to follow continuously any substan- 
tially gainful occupation and total disability shall be 
deemed to be permanent whenever it is founded 
upon conditions which render it reasonably certain 
that it will continue through the life of the person 
suffering from it. 

''With that definition and with your findings and 
examination, I will ask you to add these assumed 
statements as facts in the history of the case : 

"The plaintiff in this case in the month of Sep- 
tember 1917 entered the military service of his coun- 
try; he went to Camp Lewis while he was under 
training until about the month of April 1918 when 
he came home on a furlough and was married, re- 
maining home a few days at that time and returning 
to Camp Lewis and continuing his training for mili- 
tary service. He arrived at Hoboken, New York 
about July 4, 1918, or a military camp in New Jer- 
sey in the vicinity of New York City, then was taken 
on a transport to Liverpool, England, and after stop- 
ping there approximately two weeks reached France. 
From the time of his entry into the service and up 



Park Lusk 113 

until this time he had not been on sick call or had 
any illness of any kind. On or about the 26th day 
of September after two weeks behind the lines, about 
five or six miles, during which time they were await- 
ing orders to go over the top and into active military 
campaign, and during which time he was lying in 
water and mud, his clothes muddy and wet and no 
change of clothes for approximately two weeks pre- 
ceding September 26th until he arrived at a hospital 
— I will now give you the time as being about Oc- 
tober 14, 1918 — That upon going over the top so- 
called, he was in the Argonne Forest and in open field 
warfare as distinguished from trench warfare, and 
he was constantly under fire from the enemy a ma- 
jor portion of the time, with wet clothes upon his 
body, many of his company killed around him; that 
this warfare continued in open fighting, they ad- 
vancing some nine miles in about ten days and then 
on about the 10th of October one evening a gas bar- 
rage came over along with the shell fire. Consider- 
able excitement ensued, and he being a sergeant was 
responsible with the other sergeants with taking 
care of the horses. The horses required the gas 
masks the same as the human being and the men in 
taking care of that — in this confusion he and the 
other sergeants proceeded to aid in the actual mask- 
ing of the horses, and while doing that a horse knock- 
ed off the gas mask of Park Lusk, which he was 
wearing at that time, and due to the excitement and 



114 United States of America vs. 

jumping around of the horse which he was handHng 
at that time, it was some three or four minutes be- 
fore he got his gas mask back on, during which time 
he was inhahng gas and was in the midst of that gas 
barrage. Within a few minutes thereafter he became 
unconscious His estimate of his unconsciousness is 
from forty to fifty minutes. When he recovered he 
saw his associates in the service lying on the ground 
waiting for the cloud of gas to rise and leave. The 
barrage at that time in this warfare were lasting ap- 
proximately one hour — what they termed a one-hour 
barrage. Thereafter he returned to and with his 
company and continued to work with them, com- 
plaining to his commanding officer of cramps in the 
stomach. But preceding that report to his command- 
ing officer and within a few minutes after he regain- 
ed consciousness he had severe pains in his eyes, wa- 
ter running from the eyes, matter running from his 
nose, sneezing, pains or cramps in the stomach and 
within three hours he started vomiting. These pains 
and this vomiting condition continued with him some 
three or four days during which time diarrhea set 
in, the exact time being given as three or fours hours 
after the gas poisoning. That upon reporting to his 
commanding officer he offered to send him to a hos- 
pital but he desired to remain with his command if 
he could. He became sicker and these complaints I 
have just spoken of continued and the vomiting 



Park Liisk 115 

caused him and the diarrhea caused him discomfort. 
He, within four days time, became so sick that he had 
to permit himself to be transferred to a field hospital, 
he driving several miles on horseback and becoming 
so weak he could no longer ride a horse and he was 
then transferred to a machine gun and continued in 
that manner to the field hospital. There he receiv- 
ed some pills, and within a few days and by October 
18 the time he arrived at the field hospital being Oc- 
tober 14th, and on or about October 18th he was 
transferred from the field hospital to the base hos- 
pital at Meszes, France. There he remained for ap- 
proximately nine weeks or from October 18, to De- 
cember 18, those two dates being approximate; that 
while at the base hospital and on October 25, 1918 — . 
First let me say that on October 25, 1918 the cause 
of his admission is shown as diarrhea acute ; that on 
October 16, the same condition continued and on Oc- 
tober 26th the complication as being penumonia lo- 
bar, right upper lobe ; that on October 26th the cause 
of admission is given as broncho pneumonia, in line 
of duty — yes. And from that hospital the disposi- 
tion shown was made December 18, 1918 to his com- 
mand. The treatments received, or medicine given 
him consisted of some pills and castor oil and also 
alcohol diluted with water, the alcohol being given 
to him three times a day while he was in the hospital. 

"He reported to his command with the same pains 



116 United States of America vs. 

and suffering although he made a statement to the 
officers in charge of the hsopital that he desired to 
go back to his company rather than to go to a con- 
valescing hospital, in order that he might get home, 
he having been informed that his command would be 
leaving for home shortly. Thereafter he did report 
to his command and was taken to a camp near the 
coast of France, that he hiked to that place, he having 
great difficulty with his shortness of breath at that 
time and being hardly able to move with them. They 
moved approximately nine miles a day. That at this 
camp and after he left the base hospital he received 
medical aid and treatment similar to that in the hos- 
pital through the medical attachments to the com- 
mand. This continued until about March 1919, the 
treatment being about the same and the pain and suf- 
fering being similar to that which I have described, 
the vomiting continuing and the pains in the chest, 
following the period when he is listed as having 
broncho-pneumonia, 'and all those pains and suffering 
continued from that time to the present almost con- 
tinuously although there is a change in the vomiting 
to the extent that after he was home about one year 
he did not vomit as frequently as he did the first year 
he was home, during which time he threw up every 
breakfast for seven months continuously, as well as 
vomiting on the occasion of his taking other meals. 

"He arrived back in the United States the latter 
part of April and was taken to Fort Russell Wyom- 



Park Lusk 117 

ing, where he was discharged from military service 
on May 8, 1919. At that time the question was ask- 
ed of him if — as to whether or not he had any disa- 
biHty known to him. I will read the question, doctor, 
Have you any reason to believe that at the present 
time you are suffering from the effects of any wound, 
injury or disease, or that you have any diability or 
impairment of health, whether or not incurred in the 
military service. Mr. Lusk answered that question 
"no". He explained that by stating it was not true; 
that he was suffering as I have already outHned to 
you and that he misrepresented that fact in order 
that he might get out of the military service and go 
home. 

"An examining physician at the same time of his 
discharge certified that he had carefully examined 
the person named as being Park Lusk and carefully 
recorded the results of the examination and that in 
his judgment and belief he is physically qualified for 
military service. I will withdraw that statement as 
to the attending physician — I read from the wrong 
one. 

"If your Honor will bear with me just a moment, 
I will have this. 

"The examining physician, one James B. Low- 
rey, on May 6th, just two days before his discharge, 
to the questions and answers as to the disability, 
draws a line through them, inserting no answers to 



118 United States of America vs. 

the questions and then makes this declaration : I de- 
clare that the foregoing questions and my answers 
thereto have been read over to me and that I fully 
understand the questions and that my replies to them 
are true in every respect and are correctly recorded, 
and the examining physician also scratches through 
the statement concerning the wound, injury or dis- 
ease — the nature and location of the wound, injury 
or disease, there being no answer to that question. 

''After his discharge Mr. Lusk immediately pro- 
ceeded to his home where he arrived in a day or two 
following his discharge, his home being Crystal — ra- 
ther Arbon Valley. There he returns to the home of 
his brother and himself upon a ranch of approxi- 
mately 300 acres, 35 acres of which is in irrigation 
and the rest dry farming land, raising wheat; That 
when he entered the military service he weighed, 
there are various estimates from 165 to 175 pounds; 
that at the time of his furlough back from Camp 
Lewis to his home after he had been in training from 
five to six months, his actual weight with his clothes 
on was 180 pounds; that upon his arrival home he 
weighed 140 to 145 pounds approximately; that he 
had pains in his chest and stomach and attacks and 
pains in his eyes with water running from his eyes 
and from the nose as I have previously described. 

"Before I go on with that I want to call your at- 
tention to one additional matter. Doctor, and that is 



ParkLusk 119 

when he first went from the field hospital to the base 
hospital in France on or about October 18, 1918, 
he was unconscious for some four days, during 
which time he was wheeled around from one ward to 
another, finally coming to in the pneumonia ward of 
that hospital; that just preceding that unconscious- 
ness things turned black in front of his eyes and he 
was dizzy. 

"Now upon his arrival home he had frequent oc- 
casions of that blackness and dizziness and dizzy 
spells, they coming upon him upon occasions such as 
lifting any weight, or raising anything that would 
strain him in the way of extra exertion, following 
vomiting spells and following the inhaling of dust 
from a wheat field or as a result of harrowing or 
plowing, any operation of that kind. That during 
the first seven months after he was home he never 
retained a breakfast, going out within from 15 to 
20 to 30 minutes after he ate and vomiting it out; 
that he had vomiting spells with any extra exertion 
and in connection with his meals other than his 
breakfast throughout this period. That for the first 
four weeks after he arrived home, he attempted no 
work other than an attempt to milk some cows and 
the ordinary chores on the farm. That in doing 
that on occasions he had this blackness before his 
eyes and became dizzy and went on into the house 
and laid down and someone else came and finished 



120 United States of America vs. 

the work. That after a period of four weeks he at- 
tempted to do some haying lasting seven or eight or 
nine days and in that work drove a mower upon 
which he had to be reheved to rest because of pains 
in his stomach and chest and the pains increasing in 
his eyes and headaches. That thereafter he attempt- 
ed to plow and while the work was a job of some 
fourteen days or so, he used a gang plow or three 
plows and eight to ten horses, that he could not do 
it continuously, sometimes leaving during the time 
of doing the work during the ordinary working 
hours of the day and other times not going back to 
work — or not going out in the morning because of 
his weakness due to the vomiting. At these times 
he usually laid around the house, and would remain 
in the home trying to rest. That in the harvesting 
and running the combine — whereas before the war 
he would handle a sack of from 120 to 130 pounds 
of grain — that the sack was reduced half, he states, 
because the assumed facts show, due to its size it was 
a strain upon him, and in that manner he managed 
to handle the grain to the drill and he drilled a part 
of some thirteen or fourteen days, but not continu- 
ously, similar to the plowing. He would have to 
leave the drill and the dust would bother him and he 
would start coughing and he had pains in the chest 
and stomach. He would get off the drill and rest a 
while and go home before the days' work was done, 



Park Lusk 121 

and on other occasions he wouldn't go out mornings 
because of his weakened condition following vomit- 
ing and those things. 

"That in the combine work, as I say, he drove the 
team and he would plow some, especially as I have 
just related relative to plowing and drilling. Some 
other men would handle the sacks, tie them and 
throw them off. That on many occasions he would 
stop the combine for from fifteen to twenty minutes 
and get off with a terrible choking feeling and 
coughing and pains in his eyes and he had blackness 
at times, it would come before him and he would sit 
down a while and then go back to work, and on other 
occasions he would go home, and on other occa- 
sions would not go out in the morning at all. That 
first year he lost four days out of a ten day period 
due to the fact he was too weak and unable to con- 
tinue the work. 

"As I have illustrated this first year after he came 
home, practically the same was true of operations 
regarding work each year, laying off and the pains 
and suffering were there, every year thereafter and 
up until the very present moment except in one par- 
ticular — the vomiting has decreased in the number 
of times annually but it is still with him and he has 
the same condition I have heretofore given. 
Througout this period of time after he came home, 
he has had such severe pains in the chest and been 



122 United States of America vs. 

treated for pneumonia by home remedies each and 
every year — every winter from the time of the early 
snow and in summer in wet weather, the treatments 
being the apphcation of mustard plasters, which his 
wife or mother or brother appHed; that he is con- 
stantly taking medicine, since he has come home, 
part of it being castor oil and the whiskey and al- 
cohol which was prescribed to him in France and 
which he used there in the hospital and which he 
testified would bring relief of the pain and suffering. 
In addition to that in 1925 he was given a prescrip- 
tion by Dr. Groom for medicine which he has been 
taking up to the present time. That he has made a 
living — a fair living — through the aid and help of 
others. On the occasion of his living at his bro- 
ther's home, he had the assistance of his brother and 
his brother's wife and on his leaving there he had 
remarried and his wife had a daughter 13 years of 
age and he had a son 9 and each of these children 
helped, the plowing being done that year on the oc- 
casion when he was unable to continue, by the two 
children going into the field and doing the work. On 
other occasions he had help from the neighbors in 
the plowing and putting up wood. Sometimes his 
wife worked on the combine handling the sacks when 
he was driving it and this was because he was unable 
to do that heavier work while his wife could. That 
the harrowing on the farm he was unable to do al- 



Park Lusk 123 

though he tried, but never after the first time be- 
cause of the dust which would choke him so he could- 
n't breathe and he had great difficulty in breathing 
throughout these years whenever he had any hard 
work to do, such as chopping wood or any requiring 
any exertion at all. He would chop for a minute 
or two and would have to stop to catch his breath, 
then possibly go home. 

''The same situation developed with regard to the 
shortness of breath and the cough in the slaughter- 
ing of hogs and work in connection with the treat- 
ing of the wheat. This was done by raising the 
same above a barrel and dropping it down and then 
pulling it out. Exerting himself in such a way as 
;pulling it out caused him to become very short of 
breath and to choke and cough whenever he under- 
took it. 

'That in 1931 on July 2nd he stated in an applica- 
tion or claim for insurance benefits for permanent 
total disability that the date his disability began was 
November 1, 1918. The cause of the disability was 
left eye, and stomach and bad feet. Where received 
— in the Argonne Forest. 

"In a statement dated September 25 he gave as 
the nature of his disability claimed left eye and sto- 
mach and teeth. Date disability began was given as 
September 1918 and received in the Argonne Forest. 

"I will ask you, based upon these assumed facts 



124 United States of America vs. 

coupled with your findings and diagnosis, whether 
or not you have an opinion as to the disabihty the 
permanent and total disability under the definition I 
have given you, as to Park Lusk? 

A. I have. 

Q. What is that opinion? 

MR. GARVIN : Object to that as incompe- 
tent, invading the province of the jury and not 
a substantial statement of the facts. 

THE COURT: I have my doubts whether 
the question does contain a substantial state- 
ment of the facts. A number of things occur 
to me during this evidence that you haven't cov- 
ered in the question. 

MR. LAMPERT : May I ask at this time to add 
to the statement of facts the work record relative to 
the road work. 

THE COURT : You can add it to the state- 
ment. You can add anything in evidence. There 
has been some exhibits, I think 8, 9 and 10, is 
it, that cover matters that the plaintiff applied 
for compensation. One gives statements made 
by the plaintiff in regard to his physical condi- 
tion. There is also evidence as to his weight 
when he enlisted and when he came back. There 
is evidence covering the weight you gave and 



Park Lnsk 125 

exhibits covering other weights. There seems 
to be some conflict as to that. There is also evi- 
dence as to the time and amount he worked 
other than you have stated in the question. 
Some of these are very material matters in the 
evidence and are not included in this question. 

"MR. LAMPERT : As to the exhibits— 

THE COURT: You can't embody all the 
evidence. I don't think the law requires that 
but you have to — no one can remember all of 
this evidence complete in every statement and 
if you make a fair statement it is sufficient. 
Those occurred to me. 

"MR. LAMPERT: Might I call Your Honor's 
attention to the fact that I walked over to the desk 
and read from some of these exhibits the statement 
made by counsel, that being form 579 as to applica- 
tion. 

THE COURT: If you have covered those 
— did you cover them all. There are some 
things I don't recall your covering. 

"MR. LAMPERT : Dr. Kackley, I will ask you 
to add to that statement of facts the following : That 
each year since he came home, beginning with the 
third year after his return, he worked, under his 
brother's direction, on highway work, doing work 
running from four, five or six days annually, save 



126 United States of America vs. 

and except on two occasions, and as to these nine 
years, from the third year after his return until two 
years ago, when he did that work on the highway, 
he usually drove teams on the scraper for that period 
of four or five days. On one occasion he worked a 
period covering approximately 30 days, his duty be- 
ing that of handling the reins for the team in haul- 
ing a slip or f resno. A man rode the f resno at one 
end where he started and he drove to the place where 
it was dumped into the wagon or car, the dumping 
being done by another man. That in connection with 
that work he lost time — several days, not continuous- 
ly but at odd times and on another occasion his son 
came from school after school was out and would 
frequently take the lines and finish out the day's 
work for his father. On other occasions when he 
failed to be there at all during these few days I men- 
tioned, it was because of the fact he was sick and 
weak and unable to work and another man used his 
teams. He took them to the place of work and ar- 
ranged for another man to take his place and he 
then came home and laid around the house and rest- 
ed during the time he was off. 

"That in 1931 he made a statement to the effect 
he was working for himself farming since the ser- 
vice and he said "I make a fair living." He later 
explained and added to that that his fair living was 
the result of aid and support from others and not 



Park Lusk 127 

as a result of his own abilities or own work. That 
in September 1931, that in addition thereto under 
date of September 21, 1931 the patient states he was 
gassed in the Argonne Forest in November 1918. 
He was sent to the base hospital for nine weeks. 
That he also had pneumonia. It also states he had 
pneumonia three times since service. He had no 
doctor but his wife took care of him at home. B. M. 
irregular, two or three days without moving, then 
have diarrhea two or three days, then constipated. 
It sets in and he must use laxative. No history of 
jaundice. Also had pain in palmar surface of both 
feet just like a toothache. This condition has been 
present since service. Pain in left hip especially if 
he stoops over and had to quit work. That his pres- 
ent complaint is that he has cramps in his stomach, 
usually after breakfast or supper, from twenty min- 
utes to half an hour he vomits usually. Had dizzi- 
ness. Spells of 15 to 20 minutes duration. Patient 
stated he was on a milk diet; that he can eat meat 
and vegetables for about a week at a time without 
trouble, then it starts again and he has to return to 
milk diet to settle stomach. 

"That the medical report at this time is of a well 
developed and nourished white male of 35 years of 
age, of ruddy complexion . Does not appear acutely 
ill although eyes show some irritation. Conjuncti- 
vitis, mild, bilateral. Head ; scalp, beginning of alo- 



128 United States of America vs. 

pecia. Hair dark brown, eyes, pupils equal, react to 
light and accommodation. Nose normal. Tonsils 
hypertrophic. Tongue coated. Teeth, few missing, 
some caries. Apex in fifth interspace within nipple 
line. Abdomen flat, muscular. No tenderness or 
muscular rigidity. Small fecal masses palpable in 
course of decendens and sigmoid. Liver and spleen 
normal. Inguinal rings, no hernia. Genitalia nor- 
mal. Rectal — no hemorrhoids. Skin — multiple lit- 
tle scars over the back and chest with few pustules 
present. Bones and joints apparently normal. 
Glandular normal. Reflexes, knee jerks present and 
active. Rombergs negative. Extremities apparent- 
ly normal. Scar 3^ long extensor side of left arm, 
non symptomatic. Callouses palmar surface left 
foot under the 4th and fifth metatarsal phalang, ar- 
ticulation mild. No kidney diseases. Nocturia 
once. Denies veneral history. Diagnosis, conjunc- 
tivitis, mild, Missing teeth, caries of teeth, pyorrhea 
marked. Acne vulgaris back and chest and shoul- 
ders. Cicatrix left forearm non symptomatic. Con- 
stipation chronic. Hospitalization during service 
for stomach condition and pneumonia. No. V. B. 
or private hospital since service. Sick in bed at 
home short periods two or three days on several oc- 
casions. History of frequent headaches, constipated, 
takes physics two or three times a week. Vomits 20 
or 30 minutes after meals, usually after breakfast. 



Park Lusk 129 

Coughs and vomits. Complaint at present is stom- 
ach condition, and eyes get blurry. Has to wear 
thick soled shoes to keep feet from hurting. Feet 
sweat a lot. There is no history or clinical evidence 
of any joint pathology. There is a moderate tinea 
infection of both feet. Diagnosis : Auto intoxica- 
tion moderate from constipation and tonsils. No dis- 
ease joints. Recommend treatment. Eyes, history 
both tear sacs swelling and expressing pus from tear 
ducts. Right is swollen up now. Patient wishes to 
return home and return later if trouble continues. 
Diagnosis dacryocystitis, bilateral. Nose normal. 
Throat, chronic tonsilitis. Recommend tonsillecto- 
my ; Ears normal. Missing teeth, carious teeth, sal- 
viary calculus, yes. Heavy. Pyorrhea moderate ad- 
vanced. 

"The ex-ray shows aesophagus normal. Large 
fishhook type stomach with no deformity of the 
greater or lesser curvature. The G. C. is four fin- 
gers below left crest. The cap is in midline, fills up 
and empties. The stomach shows rapid paristalsis. 
The first plates confirm the fiuoro. Plate 2 shows 
the stomach gradually emptying with a fairly well 
formed cap. Plate 3, although a small residue is still 
left in the pyloric end of the stomach shaws rapid 
invasion of the small tract. The 6 hours plate shows 
the stomach empty. Likewise the greater part of 
the small tract. The ileum located in the mid line 



130 United States of America vs. 

over the symphysis pubic extends high up to the up- 
per border of the promontory of the sacrum and 
against the inner surface of the right innominate. 
The cecum is invaded by a mixture of barium and 
gas. The rest of the tract shows no barium. The 
24 hour fluoroscopy shows the stomach and small 
tract entirely empty. The colon from the cecum to 
the sigmoid well filled and haustrated. The hepatic 
flexure is rather low, likewise the spleenic flexure 
is level with the left crest showing marked ptosis of 
the transverse colon which dropped into the true 
pelvis. The 24 hour picture shows the same condi- 
tion with the exception that the hepatic and spleenic 
flexure have risen to the level of the middle of the 
body of the 3rd lumbar vertebrae, likewise the 
transverse is crossing the body of the 5th appendix 
is well visualised, wormlike, beaded. Gastric con- 
tents ; amount obtained 60 cc. Total acidity 64. Free 
HCL 43. Combined HCL 21. Bile 0. Bacteria, 
diplococci. Blood musuc plus. Shape of chest, 
flat, mobility normal. Palpitation — no increase or 
decreased fremitus. Percussion, right lung, nor- 
mal resonance; left lung, normal resonance. Aus- 
cultation — right lung, normal vesicular breathing, 
No rales; left lung normal vesicular breathing, no 
rales. General diagnosis based on entire physical 
condition at that time: Tinea epidermophytosis 
feet bilateral moderate ; enteroptosis colon moderate ; 



Park Lusk 131 

autointoxication moderate, from constipation and 
tonsils. No diseased joints. Conjunctivitis mild; 
acne vulgaris back and chest and shoulders. It asks 
is he confined to his bed and the answer is no. 

"There also appears, doctor, this statement — I 
am now reading a statement from his wife : This is 
a letter written from Crystal, Idaho, September 23, 
1931 to the Veterans Hospital at Boise, Idaho. Dear 
Sir : I am writing in regards to my husband Park 
Lusk who is in your hospital at present. 

There's one thing I'm afraid he'll not tell you 
about. He's a hopeless drinker. Of course he's 
ashamed of it and says he can quit any time but its 
a proven fact he can't. Now this drinking, I think, 
is also a result of the war or I wouldn't be writing 
you about it. He was a good reliable boy when he 
entered the service and come home a wreck. He 
drank more moderately at first but keeps getting 
worse. All the nine weeks he was in the hospital in 
France they gave him whiskey to keep him quiet and 
of course they drank all they could to keep up their 
nerve and now their bodies require it. So if there 
is anything you can do for this please do it. The 
army surely put that craving in him, now they should 
give him a Keeley cure and take it out. Yours truly, 
Mrs. Park Lusk. 

"With that statement of assumed facts and the 
statements I have heretofore made relating to the 



132 United States of America vs. 

definition and your findings, do you have an opinion 
as to this man's total and permanent disabiHty. 

A. I have. 

Q. What is that opinion? 

MR. GARVIN : I renew my objection on the 
same grounds as before. 

THE COURT : Have you embodied in that 
question the amounts he received when he was 
furnishing his team and labor on this farm. 

MR. LAMPERT: No, I have not. 

THE COURT: And the number of acres 
under cultivation on the different farms. 

MR. LAMPERT : I beheve I gave the size of the 

farms but I didn't give the amounts because they 
embodied another factor and there is no evidence in 
the record at this time of his earnings. 

THE COURT: I believe he said $2.00 a 
day and 50c for each horse. 

MR. LAMPERT : I am looking, your honor. 

THE COURT: He said he worked there 
for some time. The whole hinges on whether 
he was able to follow a substantially gainful oc- 
cupation. You are objecting that this question 
does not contain those things. The court is 
called upon to rule upon that question and those 
things occur to me to be in evidence. 



Park Lusk 133 

MR. LAMPERT : I will add to that the fact that 
he received, while working on the highway the going 
wage per day for himself and 35c per hour for the 
use of his teams and he supplied one or two teams. 
This is for the highway work, which I have hereto- 
fore mentioned. In order that it may be clear, I will 
also add that the farm he was operating with his 
brother from 1919 to approximately 1926 consisted 
of approximately 320 acres, 35 acres of which were 
irrigated and the rest dry farm land. Then he 
worked I think 320 acres dry farm land which he 
alternated by summer fallow and raising crops on 
approximately one-half each year. 

THE COURT : Have you embodied in your 
question some testimony relating to his weight 
in the service and after his return. 

MR. LAMPERT : I have, with the exception of 
the thing which he disputes. 

THE COURT : It isn't a question of 
whether it fits in or not. 

MR. LAMPERT : I will add that at the time he 
entered service, the record shows — that is the exam- 
iner found his weight to be 142^ pounds, within a 
month of his enlistment. 

THE COURT: Isn't there some evidence 
from some others that he weighed 143 pounds 
when he returned ? 



134 United States of America vs, 

MR. LAMPERT: I made it from 140 to 145 
pounds, and I believe that it was that. 

THE COURT: And about 175 and 180? 

MR. LAMPERT: That was when he went into 
the service. 

THE COURT: The service record shows 
142 pounds. There is a conflict in the evidence 
and this man is entitled to that dispute. 

MR. LAMPERT : He gave them this testimony. 

THE COURT : I have got to rule on this 
testimony. The service record shows 143 
pounds, some put it higher, but you haven't cov- 
ered this other that he weighed 143 pounds. You 
asked the question didn't he weigh more when 
he came back than when he went in. 

MR. LAMPERT : I felt that I had covered it. 

THE COURT : I am asking you to give 
those figures ? Did you give those figures ? 

MR. LAMPERT: Yes, sir I give the figures 
170 and 180 pounds when he entered, the 180 on 
April on coming back from a furlough, and 140 to 
145 pounds when he returned from the service. 

THE COURT : That is all in your ques- 
tion? Very well. 

Q. With this additional information, Doctor, do 
you have an opinion? 



Park Lusk 135 

A. I do. 

Q. What is that opinion ? 

MR. GARVIN : I renew my objection. 

THE COURT: Have you put in the 
amounts he earned by his own testimony where 
he received it? 

MR. LAMPERT : 35c an hour your Honor and 
I first put that in — 35c per hour for the horses. 

MR. SLAUGHTER: While he was work- 
ing on the road he was getting 35c per hour and 
$2.00 per day. Then one time he got 50c a day 
for each horse. 

THE COURT : The road work has been put 
at 50c each for the horses furnished and $2.00 
per day when working for this lady he subse- 
quently married when working on her place. 

MR. LAMPERT: I must apologize? 

THE COURT : Will you embody that ? 

MR. LAMPERT: I may add that he did about 
fourteen days work in the harvest for which he re- 
ceived $2.00 a day and 50c for each horse furnished. 

THE COURT: With that addition I will 
overrule the objection. 

MR. GARVIN : Exception please. 



136 United States of America vs. 

Q. What is that opinion ? 

A. DisabiUty — total and permanent under that 
definition. 

Q. Total and permanent disability under that 
definition? 

A. Yes, sir. 

Q. When was he first totally and permanently 
disabled under that definition? 

A. From the time he received the poison gas. 

Q. And has he been so totally and permanently 
disabled from that time up to the present, in your 
opinion, and will that condition remain throughout 
the remainder of his life in your opinion? 

A. I think so." 

CROSS EXAMINATION 

The scars on the back of plaintiff which look to be 
burns indicate that the sluffing off of tissue, it just goes 
off, rots. That there is a little acne. 

''Q. This is acne vulgaris and where these things 
that you call scars are, isn't that where there has 
been acne vulgaris and it has disappeared some time 
prior? 

A. I don't know. There are scars there and I 
don't know what has caused them. They could be 
from gas and they could be from acne vulgaris." 



Park Liisk 137 

I would call Mr. Lusk roll shouldered. It is not always 
true that a man who has a roll shoulder with a hump in 
his back has a flat or sinking in the front. I don't know 
as lungs are different in a thin man than in a stout man. 
That might be just adipose on the stout man. You could 
tell if the lungs in a thin man are long and the lungs in a 
heavy set man are short. You know the lung is in the 
thoracic cavity but you can't see it. A percussion on the 
lung gives a resonant sound showing it has got air in it, 
and when you hit over his heart it is muscle tissue and 
you get a dull sound. He was in the Argonne in Oc- 
tober or September, 1918. I don't recall anything about 
the weather except rain. If it ever stopped raining I 
don't remember it. I was with the men in the infantry. 
Machine guns are a part of the original outfit. The 
dough-boys in the Argonne had regulation uniform and 
in addition a rain coat or overcoat and a helmet and gas 
mask. I don't know what kind of gas the plaintiff got. 
I only know the kind of gas we were getting and I based 
that on my personal observation and the gas report of 
the German Empire in 1926. They claimed they used 
practically all mustard gas. 

''Q. So that portion of your testimony takes in 
your own observations too? 

A. And the report of the chemical warfare of the 
German army. 

Q. And I think you mentioned on your direct ex- 
amination before I interrupted at the time you made 



138 United States of America vs. 

your examination you — the young man told you 
something about it? 

A. Yes, he done told me something about that. 

Q. And you took that into consideration. 

A. Not so much as I did my own observations. 

Q. Not so much, but you did take it into consid- 
eration. 

A. I reckon I did. I know the front I was on in 
September they would throw over tear gas, and mus- 
tard gas. They threw that over to get us to vomit- 
ing and so we couldn't keep our masks on. 

MR. GARVIN : We move to strike that on 
the ground he has taken into consideration 
statements of the witness at the time he made 
the examination. 

THE COURT : Do you mean his testimony 
of opinion? 

MR. GARVIN : His opinion. 

MR. LAMPERT: In our question we reminded 
him to stick to his findings, excluding any state- 
ments and he gave his opinion accordingly. 

MR. GARVIN : I think the witness has tes- 
tified that he did take that into consideration. 

THE COURT : You made the examination 
here, did he relate to you as a patient does a 



Park Lusk 1 39 

history of the case, explain to you how he felt 
and the causes in the past which brought that 
condition on — a history of his case. Did he tell 
you anything like that at the time you made the 
examination. 

A. No, he only told me where he was at. We 
happened to be on the same sector, and they started 
off that way and I know that. 

THE COURT : Just what he told you ? 

A. He said he was on that sector and had mus- 
tard gas. I don't know this man in any sense of be- 
ing close to him. 

THE COURT: Before I express an opinion 
here, do I understand that the only things he said to 
you was as to where he was at ? 

A. That is all. 

THE COURT : And do you limit your opin- 
ion exclusively to your examination then and 
the history of the case you heard here develop- 
ed by counsel in his hypothetical question. 

A. I do — I don't believe I really took anything 
else into consideration. 

THE COURT : There is a question, did he 
say anything to you with a view of being a wit- 
ness here. A physician who takes into consid- 



140 United States of America vs. 

eration a history given to him, the law excludes 
him from giving an opinion. 

A. I knew I was to be a witness. 

THE COURT : I doubt whether the plain- 
tiff really told him any history at that time when 
he made the examination but he only told him 
he — where he was and the doctor confines his 
opinion, without allowing any history to come 
in, to his examination and the facts counsel has 
given. It wouldn't come under that rule be- 
cause he didn't take a history. 

MR. LAMPERT: Shall I proceed to ask him 
further ? 

THE COURT : You might do so. 
Q. He did tell you he had been gassed ? 
A. Yes, sir; 
Q. And you took that into consideration? 

A. I don't know that I did. The most he told me 
was where he was gassed and where he was at along 
that time and I really don't know if I took it into 
consideration, but I did know at that time I was to 
be a witness. 

Q. Would you testify definitely that you didn't 
give it any consideration ? 

A. I don't know that I did. 



Park Lusk 141 

MR. GARVIN: I renew my objection. 

THE COURT : It is denied. 

MR. GARVIN : Exception. 

THE COURT : I will think that over 
whether that is sufficient reason to not let him 
testify. That is limited to history — the history 
he received from the plaintiff. He says he 
never took that into consideration. The ques- 
tion is was it given to him, if it was it precludes 
him from expressing an opinion. I will think 
that over. You can go ahead and I will think 
it over. 

Q. At the time you examined him, he asked you 
to make an examination for the purpose of testify- 
ing in this case ? 

A. Dr. Groom asked me to look over this man." 

I don't know what they used as protection against gas 
before the gas mask. I don't know that gas wouldn't 
have a tendency to penetrate cloth. If a gas mask was 
a little bit thin our instructions were to discard it. The 
mask was made of rubber tissue with some kind of stuff 
on it. The rain coat was made of rubber. The overcoat 
was the heavy O. D. Woolen overcoat. The clothes were 
the ordinary O. D. Woolen suit. The woolen underwear 
was in two pieces. Yes, I suppose the gas would have 
attacked the men's hands rather than their backs because 



142 United States of America vs. 

the back was protected. I don't know where plain- 
tiff's hands were. I generally had mine in my pocket. 
It was cold over there you know. I was never uncon- 
scious. During cold, wet weather it is the tendency of 
mustard gas to drop to the surface. It would not take 
a man very long to put on a gas mask. I think I could 
beat two seconds. When they told me there was gas 
out there I took it on faith. I never tried to take my mask 
off and get down to the ground and see if there was any 
gas. After we got on the front we got scared. I don't 
believe mustard gas would nauseate because they gener- 
ally put over some of the other kinds. If a high explosive 
shell struck in the ground close to you you would vomit, 
but the smell of it never did it, it was the shaking up that 
did. They claimed -that you got a Httle air in the stom- 
ach, but I think you are right that gas couldn't get in the 
stomach unless it reached some of the food you were 
eating or some of the water you were drinking. I don't 
see how much gas could get in the stomach without get- 
ting it in water or food. The Germans claimed you 
swallowed enough air to cause gastritis from it. That is, 
inflammation of the stomach. This gas has a tendency 
to irritate the membrane of internal organs. 

"Q. And it is a fact recognized by the govern- 
ment by the United States and all the Allied countries 
and the German army that if gas is going to injure 
you the result will be obtained, the injury will be at 
its maximum in a period of six months, isn't it, doc- 
tor? 



Park Lusk 143 

A. I don't know what they claim. My personal 
observation is this — I would take exception to all 
those things. 

Q. But you know that is what the medical au- 
thorities both the Allied and German armies hold ? 

A. We often accept a theory and in a short time 
we all change our minds, just like we change our 
religion and our politics — and that is the way with 
the governments." 

"Q. But you do know that that is what the medi- 
cal authorities of the allied and German armies hold 
and the allied and German government? 

A. Yes, I done read that. 

Q. That gas if it is to have any effect on you, 
if it is going to run into some other condition, it will 
take place within six months? Isn't that right? 

A. That's what they all say. 

Q. You don't agree with the government? 

A. No, sir, I done got some of that gas and the 
government didn't." 

Yes, we gave alcohol for gas and everything else. You 
could get the patient unconscious with it and he thought 
he was all right. If he had the gas mask on, his face 
shouldn't be burned and if he had his hands in his pockets 
or gloves on, they would be protected. 



144 United States of America vs. 

"Q. And if he had had a gas mask on, he would- 
n't have been gassed? 

A. Unless you have your mouthpiece in your 
mouth it is worthless — you know that tube that goes 
into the mouth — he has to keep that breathing tube 
in his mouth. 

Q. Assuming that a gas mask had been raised 
up — and the mask was a thin rubber sheet — 

A. That's the only kind we ever saw. 

Q Assuming that the mask was slipped out of 
place — 

A. (interrupting) If the tube was in his mouth 
he would get a certain amount of protection — enough 
to keep his face from being scarred a great deal. 

Q. Just a minute, doctor. It is only a moment's 
work to pull down the mask and put it in shape? 

A. Just a minute — more a matter of seconds. It 
won't take a minute. 

My opinion in this case is based upon the supposition 
that the plaintiff was actually gassed. 

"Q. And if he was not gassed you would change 
your opinion about his being permanently and total- 
ly disabled, would you. 

A. Well he is awful ill — from what I don't know 
but it seems as if his throat and lungs are in bad 
condition. 



Park Liisk 145 

THE COURT : You said a minute ago that 
it began when he was gassed. Did the gas have 
anything to do with it. I don't quite get your 
last statement? 

A. I am taking — I know nothing about the man 
personally. I am taking it from what the attorney 
said. 

MR. LAMPERT: May I suggest that the 
question was if he were not gassed would it 
make a change. It was based upon the assump- 
tion that he was in error. 

Q. If he had never been gassed, did you say — 
would you say he was permanently and totally dis- 
abled? 

A. Possibly from some other cause then. 

Q. He would be permanently and totally disabled 
but it could be from something besides gas? 

A. Yes, if he had never been gassed. 

Q. Would he still be permanently and totally dis- 
abled? 

A. I would judge so from that lung of his. 

THE COURT : When do you think that be- 
gan. 

A. I don't know — if he wasn't — 

THE COURT : That is the question here. 



146 United States of America vs. 

A. I would have no way — I am just basing it on 
what I heard here." 

"Q. If he were not getting air his face would be 
blue? 

A. That would depend upon what he is doing. If 
he is leading a quiet life it does not require much lung 
tissue to keep the lung going. Just to sit down and 
do ordinary work it does not take very much air. 
You can almost bury a man and he will live for quite 
a while, but if he kicks around and consumes more 
air he would soon go. 

Q. You said the man was not getting sufficient 
air, didn't you so testify? 

A. That is judging from the condition of his lung 
now. 

Q. Do you say he isn't getting sufficient air ? 

A. Yes, basing it on the question as to how he 
was handicapped in his work." 

A man in his position, who is not getting enough air, 
couldn't get out and do manual labor and keep it up. He 
might do it a short time, but not every day in the week. 
I reckon he could work as a clerk if it wasn't too much. 
Working as a watch maker is another matter as it re- 
quires absolutely no physical work. No more work now 
than getting your breath — no more exertion to fix a 
watch than getting a breath. He wouldn't have air enough 



Park Liisk 147 

to announce trains at a depot. It takes a lot of lung 
power for that. He couldn't run an information desk. 
He would have to talk too much. I reckon he could han- 
dle book work, but maybe he hasn't got education enough. 
As far as the physical condition is concerned, maybe he 
could. He couldn't do the work you are doing. He 
couldn't talk like you do and make a living out of it. He 
couldn't do anything that takes as much air as that and 
make a living. It depends on what he is doing as to 
whether he gets enough air. At the time I examined him 
he wasn't doing anything. When there is a blue com- 
plexion, there is a lack of air. If it developed that the 
plaintiff had gained weight between the time he went into 
the army and when he came out, whether I would say that 
he had suffered in his health would depend on what he 
was doing — if he wasn't doing anything at all, he would 
gain maybe. Everyone in the army had diarrhea. I 
never saw an exception. If the plaintiff had this diarrhea 
in the army and then had pneumonia and he also suffered 
from scabies, pneumonia may leave him totally and per- 
manently disabled, scabies wouldn't, but diarrhea would 
contribute to it. Pneumonia often leaves the patient bad- 
ly crippled in the lungs. A man out of the army who had 
those things in 1924, about five years after his discharge, 
and who said that the only thing he was suffering from 
was bad teeth might not have known his condition. We 
all had the itch over there. It didn't amount to anything. 
That wouldn't exactly make him totally disabled, but it 



148 United States of America vs. 

would make him temporarily disabled while he was 
scratching. Diarrhea is a fearful disease the way we 
had it over there. It sometimes leads to a total and per- 
manent disability. It was during the civil war and was 
in this war. 

"Q. Would you say a man suffering from diar- 
rhea and who was in the hospital about a month and 
was subsequently discharged out of the army was 
permanently and totally disabled ? 

A. He had pneumonia you said and I would take 
that very much into consideration. 

Q. Well doctor answer me this. Would you say 
that diarrhea would make a man totally and perma- 
nently disabled? 

A. Depends on how bad he had it, it is recognized 
as a disease which unfits one for hard work. 

Q. Assuming this man who had it came back on 
a transport, rode a train back and then in 1933 sat 
in a court room for two days continuously, would 
you say that he was totally and permanently disabled 
from diarrhea? 

A. Not from diarrhea." 

Q. Then pneumonia is a condition — at the time 
you examined him, do you believe that would result 
in his being totally and permanently disabled or not? 

A. It takes time. 



Park Lusk 149 

Q. After one passes the crisis in such a case the 
man is considered well over it? 

A. For that particular time. 

Q. But you can't tell whether it is going to result 
fatally or not — you mean to say that ? 

A. You can't f orsee what is going to happen after- 
ward. 

Q. And if this case came to you in 1920 with 
that, by now couldn't you tell if he was going to be 
totally and permanently disabled ? 

A. What year? 

Q. 1920? 

A. Well no, not in 1920 I couldn't." 

DR. C. P. GROOM, a witness on behalf of the plain- 
tiff, being first duly sworn, testified as follows : 

DIRECT EXAMINATION 

My name is C. P. Groom. I am a physician and reside 
at Pocatello. I have practiced medicine twenty-five years. 
I am licensed to practice in Idaho. I am a graduate of 
Northwestern University. In Idaho, I have been located 
in Rupert and in Pocatello for the last ten years. In the 
general practice I have had patients suffering from gas 
poison as a result of war who have been treated under 
my direction. When I returned from the army I had a 
man who had been gassed in the army. I have made a 



150 United States of America vs. 

study of works and government reports by those who 
have speciaHzed in diseases growing out of injuries to 
the human body as a resuh of gas poison, in Keene's 
Surgery, Bicknons Practice of Medicine and some more 
recent hterature by Colonel Gilchrist. 

I have examined the plaintiff in this case. The first 
time I saw him was in February, 1925. I prescribed for 
him at that time. At that time he was complaining of 
gastrointestinal disturbances and I prescribed for gastro 
intestinal diarrhea. Later I made an examination for the 
purpose of testifying in this case. That physical exami- 
nation was made, I think, in October, 1931. The x-ray 
examination was in December, 1931. In the regular 
physical examination I stripped the man and examined 
his chest, eyes, nose, throat, abdomen and skin, and later 
I analyzed the x-ray picture. Exclusive of any history 
and of my examination and prescription in 1925, basing 
my answers entirely upon my examination for the pur- 
pose of testifying in this case, I did make findings as fol- 
lows : 

*'The findings in this case were, this man had con- 
junctivitis and a rather inflamed throat and larnyx 
from laryngitis, a cough. I examined his lungs and 
he had a number of coarse and fine rales over both 
front and back surfaces of his lungs ; that he had con- 
siderable caving in or shrinking away of his clavicu- 
lar spaces ; that he had a dullness, a flatness on per- 
cussion on the upper part of his chest and other areas 



Park Lusk 151 

of his chest and pain and tenderness in his abdo- 
men." 

Upon these findings my diagnosis was chronic con- 
junctivitis, chronic laryngitis, inflammation of the larynx 
and trachea, chronic bronchitis, and a good deal of pain 
over his abdomen due to some particular condition. A 
history of the man's case, of the physical findings, would 
aid me in making a final definite diagnosis and giving an 
opinion as to his abiHty or disability to perform labor. 
The symptoms of gas poisoning that show themselves 
are, — 

''Sometimes these men felt very little ill effects 
from the gas for three or four days and sometimes 
they felt it immediately and they were rendered un- 
conscious at the time they got this gas. These gases 
were mixed with various chemicals that produced ir- 
ritation of the mucous membranes of the eyes and 
it produced severe congestion of or inflammation of 
the membranes of the tonsils and larynx which would 
be likened to a severe sore throat. This gas also 
penetrated down through the air passages into the 
lungs and wherever the lung was exposed — for in- 
stance where there was not mucous to cover that 
portion, of the lung it resulted in a burning — there 
was first a burning of the bronchii, the bronchial tree 
and cells but it very seldom reached down to the fine 
bronchials of the lung. Then due to the inhalation 
of this gas it produced a vomiting — the gas produced 



152 United States of America vs. 

that. This condition went on for several days or 
more depending upon the amount of gas taken and 
these inflamed areas became infected and the patient 
became sick. He had to leave the field of action and 
was taken to a hospital where a great majority of 
them who had been gassed severely developed a bron- 
chial pneumonia and gastro intestinal troubles and 
from the severe burns sometimes developed blindness 
of one eye, and in some blindness of both eyes. These 
conditions went on and as the condition improved, 
from their bronchial pneumonia they would have a 
cough, of course, and sometimes spit up blood and 
coughed. The entire respiratory system was severe- 
ly infected in these cases. They had a destruction 
of the mucous membranes of the lungs and air pas- 
sages which went with this and it resulted in a scar 
tissue and the scars contracted until they would — 
there would be a contraction of the various areas 
of the bronchial tubes and in some cases it shut ofif 
their breathing." 

Thus it was not only a traumatic but an injury to the 
respiratory organs but the poison throughout the system 
affected his heart, kidneys and his system generally. The 
late or remote effects of gas poison after years of suf- 
fering — 

'The Government of the United States appointed 
a Commission in 1926 to investigate. This commis- 
sion was comprised of three men of which Colonel 



Park Lusk 153 

Gilchrist was one. These men went over a large 
number of case histories — histories of gas cases — 
and at the conclusion their findings were — they 
found that after ten years, which was the time they 
made their report in 1928, they found a lot of these 
gas cases showed a decided organic residum or con- 
dition remaining as the effect of gas poisoning and 
the most of them showed definite pathology of the 
pulmonary cavity; that these men were subject to 
recurrent bronchial attacks and repeated bronchitis. 
That if they had been severely or seriously enough 
gassed they were found to have, on undue exposure 
or over exertion or over work, under adverse or irri- 
tating circumstances, they would be subject to re- 
current attacks of broncho-pneumonia, bronchitis 
and recurrent attacks of conjunctivitis due to the still 
lingering in their system of the after effects of the 
poison from this gas." 

At this point, plaintiff's Exhibit No. 11, being x-ray 
plate of the plaintiff Park Lusk was offered and admitted 
in evidence without objection. 

"This picture shows several scars which are cal- 
cified or ossified. This is Nature's way of taking 
care of any diseased condition in the lung. It shows 
a great many areas radiating out through the lungs 
which show evidences of burning and irritation ; al- 
so deposits of, or calcification of these through here 
(illustrating) shows some calcification of the upper 



154 United States of America vs. 

portion of the chest which accounts for some thicken- 
ing in his — in here — due to serious inflammation he 
had had in his lungs as a result of infection. Other 
than that there isn't a great deal in the picture than 
these real and scar tissues which radiate out of — 
through the surface of the lung. 

Q. You can take your seat. Do you — you were 
present in the room when I gave — you heard the 
assumed facts related to Dr. Kackley? 

A. Yes. 

Q. Assuming those facts and the definition of 
permanent and total disability to be, total disability 
is any impairment of mind or body which renders it 
impossible for the disabled person to follow contin- 
uously any substantially gainful occupation and to- 
tal disability shall be deemed to be permanent when- 
ever it is founded upon conditions which render it 
reasonably certain that it will continue through the 
life of the person suffering from it. With that defi- 
nition as to total and permanent disability and those 
assumed facts, together with your examination and 
findings as you have stated, do you have an opinion 
as to whether or not Park Lusk the plaintiff in this 
case was totally and — is totally and permanently 
disabled? 

A. Yes, sir. 

Q. Do you have an opinion as to whether or not 



Park Lusk 155 

he was so totally and permanently disabled on or be- 
fore May 1, 1919? 

A. Yes. 

MR. GARVIN : I object as the witness is 
not qualified to answer and it invades the pro- 
vince of the jury and the hypothetical question 
as stated was not a substantial and fair state- 
ment of the facts. 

THE COURT: Overruled. 

MR. GARVIN: Exception, please. 

Q. Will you give that opinion? 

A. Yes, I have an opinion and I — 

Q. First just a moment — what diagnosis did you 
make and what ailments, if any, did Park Lusk suf- 
fer from as a result of your examination, plus the 
assumed facts? 

A. Plus my examination and plus the assumed 
facts that was given in the hypothetical question I 
should — I would make a diagnosis of chronic bron- 
chitis, chronic gastro intestinal disturbances, chronic 
conjunctivitis and chronic laryngitis. 

Q. Due to what? 

A. Due to the gas poisoning he had received in 
the army. 

Q. You have stated that you have an opinion as 



156 United States of America vs. 

to his total and permanent disability preceding May 
8, 1919, what was that opinion? 

MR. GARVIN: I object as the witness is 
not qualified to answer and it invades the prov- 
ince of the jury and the hypothetical question 
did not give a fair and substantial statement of 
the facts. 

THE COURT: Overruled. 
MR. GARVIN : Exception. 

Q. What is that opinion? 

A. That he was totally and permanently disabled. 

Q. Has he been disabled totally and permanently 
from that date to the present time? 

A. Yes, sir. 

Q. Is it your best judgment it will continue and 
that he will remain — that Park Lusk will remain to- 
tally and permanently disabled throughout the re- 
mainder of his life? 

MR. GARVIN : Same objection. 

THE COURT : Overruled. 

MR. GARVIN: Exception. 

A. Yes, sir. 

THE COURT : You say the total and per- 
manent disability will remain through his life? 
A. Yes, sir." 



Park Liisk 157 

CROSS EXAMINATION 

You might say that an individual suffering from con- 
junctivitis is one who when he wakes up finds a httle 
matter in his eyes. At times, yes, almost everyone pres- 
ent in this court room has bronchitis. 

Referring to plaintiff's Exhibit No. 11, the white Hne 
that runs up is the posterior wall of the chest, and possibly 
some of the glands. A portion is that of the lymphatic 
glands, which take up the poisons circulating through the 
blood stream and hold them. The plaintiff is 42 or 43 
years of age and in a man of his age in and around the 
area where the lymph glands are I would expect to have 
calcification deposits. The calcification deposits that I 
have testified to in this x-ray are in the location of the 
lymph glands. It possibly is a calcification in the lymph 
glands. The other lines are to be expected in a man of 
42 or 43 years old, especially if he has had a great deal 
of bronchial infection in his lungs as this man has. You 
find some of those lines in any normal lung, but in this 
case you also have a running out of both these — both 
sides of the chest into the open portion of the chest. The 
lightness of the normal portion can be seen between the 
ribs. The heavier the lines, the lighter it shows on the 
x-ray plate and the thinner the tissue, the darker the pic- 
ture will show. The condition I have called attention to 
is the lightness. In a man built the way the plaintiff is, 
round shouldered, you would expect to find a sunken area 
under the super clavicular, — that is a depression on the 



158 United States of America vs. 

outside. That is the condition I find in this man. That 
is not necessarily a normal condition in a man built like 
the plaintiff. The portion in the front of the body and 
the lungs conforms to the build of this man in the back. 
Certain conditions that might cause this depression or 
sinking in in the front, it does not particularly in his con- 
dition. I don't think it is a normal condition in a man 
built like the plaintiff. I don't call him round shouldered. 
He has sloping shoulders, but not round. Plaintiff's mus- 
cles are normal. To some extent I did take into consid- 
eration the condition of this man's voice, the hoarseness, 
in arriving at my diagnosis. It might be in some partic- 
ular case that would be an indication of infected tonsils 
or laryngitis. This man may have had a husky voice all 
his life, but that is a condition arising from thickened vo- 
cal chords. I didn't take that into consideration because 
a great many men have hoarse, husky voices. His hoarse- 
ness has nothing to do with his total and permanent dis- 
ability. I never saw any man immediately after he had 
been gassed, nor within a period of three or four days 
afterward. The purpose of this gas was to put a man 
out of action for a time. It is not according to what I 
have read that if gas poisoning is going to impair health 
that must happen within six months after the exposure 
to gas. According to Colonel Gilchrist they find organic 
conditions occurring up to ten years when they made this 
report. I don't agree that the effects of gas, if it brings 
on total and permanent disability, would do so within a 
period of six months. I do not know that that is what 



Park Lusk 159 

is shown by the report of the allied and German govern- 
ments as a result of a study of the effects of various 
gasses on the human system. I know that the allied and 
German governments have practically agreed on this re- 
port that the United States Commission made. I read 
Gilchrist's report of 1924 saying one thing and then in 
1928, they made another report. I think the allied gov- 
ernments as well as the German governments took the 
stand that if gas brings on total and permanent disability 
it would do so within a period of six months. I don't 
think all governments engaged in the World War took 
that stand with reference to gas prior to the Gilchrist 
report. As I understand it the first dose of some of the 
gases was nauseating, but the reports from all the allied 
governments show that these gases were mixed. It is 
possible that when gas had attacked the gastro-intestinal 
tract, years afterward you would expect an injury to the 
tissues of those organs. It would also affect the heart 
and kidneys. The gas might injure the gastro-intestinal 
tract and not affect the heart and kidneys. My answers 
are based on the proposition that this man was gassed. 
Plaintiff has physical findings enough to make him total- 
ly and permanently disabled even though he never receiv- 
ed a whiff of gas. If he never received a whiff of gas I 
attribute the cause of his condition to some general sys- 
temic infection. The plaintiff is disabled and possibly 
should not have been working when, along with his bro- 
ther in 1919 and 1920, with the help of one man, he got 



160 United States of America vs. 

in about 300 acres of farming. A man who in 1919 did 
that work with his brother would still be totally and per- 
manently disabled in 1933, and he was totally and perma- 
nently disabled through all those years. 

"Q. Then, doctor, assuming that in 1920 until 
1926, or 1921 to 1926, three men may have worked 
during 1920, but from 21 to 26 this same farming 
operation was done and completed by two men, the 
plaintiff and his brother, do you still say that if he 
could do that farm work he was at that time totally 
and permanently disabled ? 

A. Yes, sir." 

A man does not have to be blinded in both eyes or have 
both arms cut off to be totally and permanently disabled. 
A man in bed with the measles is disabled for that time. 

"Q. And then, doctor, a man farms by himself, 
having certains portions of the farming to do, the 
harrowing being done by his son and daughter, or 
stepson and daughter, but by two children. They 
did the harrowing. He through all the harvest did, 
with some help, sew sacks and do other work — two 
or three men took care of the crops at that time, and 
from that time on he has done farm work, do you still 
maintain that the man is totally and permanently dis- 
abled and unable to follow a gainful occupation? 

A. I do. 

Q. Suppose on top of this he worked on the road, 



Park Liisk 161 

would he still be on top of this, totally and perman- 
ently disabled? 

A. Yes, sir." 

I found a wound on his hand which he said was from 
shrapnel. It was a minor wound and I didn't give it any 
thought. He told me that when I first saw him in 1925. 
Between 1925 and the time I treated him I saw him at 
times professionally. After seeing him once in 1925 and 
a time or two in the intervening years and making this 
examination I have testified to in 1931, I remember his 
history back in 1921. I don't know that it was a shrap- 
nel wound. He came to my office this particular day to 
see another doctor and waited some time. He couldn't 
find the other doctor and we visited, he telling me this 
story of his army experience. After waiting an hour 
or so he decided to let me prescribe for him and I remem- 
ber his story as rather outstanding. No one else was pres- 
ent. It was possibly 2:30, after lunch. I do not think 
that this man should lie in bed all the time from now on. 
He should stay out in the open and do as little physical 
exertion as possible, staying away from sudden changes 
in temperature and avoid becoming overtired or overex- 
erted, in order to build back his health. He could raise 
stock if he didn't do any physical work connected with it. 
I don't think he could be a watchmaker or to clerk or be 
a post master or mail deliverer or do any kind of clerical 
work. He could not work at an information desk, at an 
aviation field, not in the dusty gaseous field. The only 



162 United States of America vs. 

thing he could do is to take care of himself and to con- 
serve his strength in order to prolong his life. He could- 
n't solicit business or sell merchandise; that would re- 
quire considerable effort. He would not be in exactly 
the same condition now if instead of farming he had so- 
licited business in the open. This man was totally and 
permanently disabled probably between the time he was 
gassed and the time he left the hospital, perhaps at the 
time he fell in the field. I think at the time he was dis- 
charged from the hospital he should have been sent home. 
The red and inflamed eyes are not a permanent disability 
and are not considered a permanent disability. His cough 
is one of the symptoms of a pulmonary condition which 
renders him permanently disabled. Not everyone is to- 
tally and permanently disabled from just minor colds that 
develop a slight bronchitis. The caving in of his super- 
clavicular is part of the chain of symptoms that cause 
his total and permanent disability. 

"Q. If he only had that he wouldn't be totally 
and permanently disabaled, that is a fact, isn't it? 

A. He might have other symptoms that would be 
the cause of the depression, it would cause him to be 
totally and permanently disabled. 

Q. Will you answer me. If he only had that he 
wouldn't be totally and permanently disabled, would 
he? Will you answer that? 

A. Not if he had that alone and no other physical 
findings." 



Park Lusk 163 

I have not been paid for my testimony. My usual fee 
is $25.00 for a case. I have been subpoenaed in this case. 
I reported my physical findings and his condition to the 
plaintiff. 

"Q. Doctor, during the progress of the trial you 
have been working with counsel, they have been tell- 
ing you what to testify to and you have been giving 
him books to read and advising him on these points ? 

A. He was not familiar with the medical terms 
and he had written in and I explained them to him. 
He was not famiHar with them." 

The plaintiff rested. 

MR. GARVIN : Comes now the defendant at the 
close of the evidence for the plaintiff, the plaintiff 
having rested and moves the court to direct a verdict 
in favor of the defendant on the ground that the 
evidence is insufficient to show that the plaintiff be- 
came totally disabled or permanently disabled or to- 
tally and permanently disabled at a time when the 
insurance policy was in full force and effect and that 
the evidence affirmatively shows that the plaintiff 
has and did follow continuously a gainful occupation 
and a substantially gainful occupation since the pol- 
icy lapsed ; that the evidence affirmatively shows that 
the plaintiff has in fact followed continuously a sub- 
stantially gainful occupation during all the years 
since his discharge up to the present time. 



164 United States of America vs. 

THE COURT : I will have to deny the mo- 
tion for a directed verdict. 

MR. GARVIN: Exception." 

GEORGE A. MEFFAN, a witness on behalf of the 
defendant, being first duly sworn, testified as follows : 

My name is George A. Meffan. I am United States 
Marshal for the District of Idaho. I have control of the 
subpoenas and the serving of the same on the witnesses 
in this court. I have examined the record and I find no 
record that Dr. C. P. Groom was subpoenaed as a wit- 
ness in this case. No subpoena was issued. 

W. D. McREYNOLDS, a witness on behalf of the de- 
fendant, being first duly sworn, testified as follows : 

My name is W. D. McReynolds. I am Clerk of this 
court. As such I have control of the record of witnesses 
subpoenaed. No subpoena was issued from my office for 
Dr. C. P. Groom and none came into my hands. My of- 
fice issued no subpoena. 

DEWEY FORREST, a witness on behalf of the de- 
fendant, being first duly sworn, testified as follows : 

DIRECT EXAMINATION 

My name is Dewey Forrest. I live at Pocatello and 
have lived there for five years. Before that I lived at 
Downey, Idaho. I have known the plaintifif for two years. 
I became acquainted with him first in the fall of 1931 
when I went over to run a combine. At that time I work- 



Park Lusk 165 

ed with him on the combine. He worked driving the team 
of eight horses. That continued for about fifteen days. 
He drove the combine during all that time. He only took 
a day off when it stormed. It rained and that was the 
occasion for not harvesting that day. I did the bagging 
and ran the machinery. I have driven a combine. That 
is a one man's job. 

CROSS EXAMINATION 

I was doing the sacking because that was my job. I 
was designated to do this by Bistline, Incorporated. Dur- 
ing the time I was there I ate and slept at Park Lusks. 
I slept out in the yard. I took my breakfast there. I 
did not observe anything unusual at all about Mr. Lusk's 
physical condition during that time, not to my knowledge. 
During the storm that I referred to I do not know what 
Mr. Lusk was doing, whether he was in bed or where he 
was. During that time the machine was stopped at dif- 
ferent times for other than mechanical defects. I would 
say it would sometimes be from 10 to 15 minutes at a 
time. Mr. Lusk sometimes remained on the seat. I did 
not observe anything unusual in the position of Mr. Lusk 
during those resting periods. Sometimes he would get 
off the machine during these periods, lots of times for a 
drink or for sacks. Sometimes he would get the sacks. 
At times the dust was pretty bad while he was doing this 
particular work. We did not stop the machine more 
frequently during the dusty periods than on other occa- 
sions. I am quite sure of that. 



166 United States of America vs. 

REDIRECT EXAMINATION 
I was putting the wheat in the sacks. That was not 
for the purpose of keeping an exact measurement. 

CLARK CAMERON, a witness on behalf of the de- 
fendant, being first duly sworn, on oath testified as fol- 
lows: 

DIRECT EXAMINATION 

My name is Clark Cameron. Now and for ten years 
I have lived at Pocatello. I know Park Lusk and have 
known him about 5^ years. During the past 5 or 6 
years I worked with Bistline, Incorporated, at Pocatello. 
They handle glass. Hardware, repairs and farm machin- 
ery. I have seen Park Lusk quite often during the past 
4 or 5 years and especially during the fall of the year. I 
have been at his wheat farm at times to make dehveries 
of repairs and parts for his combine and there for col- 
lections. That would be during the threshing season. I 
have quite often found the combine stopped waiting for 
repairs. I saw him the fall of 1932, possibly 7 or 8 times. 
I went to his ranch. He would be harvesting the wheat 
crop and I saw him engaged in harvesting, driving the 
horses on the combine. On one occasion I rode a short 
distance with him. He had a man by the name of Hi 
Lewis running the bagger, sacking wheat and sewing 
sacks. Part of the time these two men were taking care 
of the combine and part of the time he had additional help, 
one boy and at one time two boys. 



Park Lusk 167 

CROSS EXAMINATION 

I saw Park Lusk 7 or 8 times this fall. On one oc- 
casion I was on his ranch about an hour. I would say 
that was the longest of any occasion. I helped load part 
of a load of grain one day and hauled some of the grain. 
I was out there once after Mr. Lewis left the job. I did 
not see Mrs. Park Lusk on the machine in Lewis' place. 
At that time the machine was not running. I saw the 
combine running after Lewis left, but not on Lusk's 
place. At that time either his boy or his step son was 
sacking. I would say the longest time I ever observed 
the combine in operation was one hour. 

REDIRECT EXAMINATION 

Mr. Lusk was driving the combine every time I saw 
him. He was driving on the other farm when I was 
there. 

M. V. TALLON, a witness on behalf of the defend- 
ant, being first duly sworn, testified as follows : 

My name is M. V. Tallon. I moved to Arbon, Idaho, 
the first or last day of September, 1914, and lived there 
continuously until the fall of 1922. Then lived in Poca- 
tello until the spring of 1931, but I still had my farm at 
Arbon. For the first few years I wasn't at Arbon during 
the cropping season, but from 1927 on I have been there 
every summer, off and on. During the plowing season 
and during the harvest season. I have known Park Lusk 
since about the fall of 1914. My farm at Arbon is just 



168 United States of America vs. 

about six miles from where Lusk lives now. I have seen 
him plowing. I can't give the exact dates. I have called 
on him a number of times in the last six seasons in my 
capacity as field man for Mr. Bistline and at times have 
found him on the plow during the last six years. I have 
called on him during the drilling season and on one oc- 
casion I saw him drilling. I have called on him during 
the harvest season. With the exception of one time, he 
was driving the combine. That is during the past six 
years. On one occasion he was sacking. 

CROSS EXAMINATION 

I have been on the Lusk place for more than an hour 
at a time. At one time Mr. Bistline operated a combine 
on this place and hired Mr. Lusk and Mr. Force to run 
it. I helped assemble that combine and started it in op- 
eration and I think I was there most of that day. I was 
there until the combine was running satisfactorily. Other 
than that time I simply went out there with repairs and 
for collection, on matters that required being there a very 
short time. Usually when I went out the machine was 
not in operation and I didn't wait to see it get into op- 
eration. 

CLAUDE BISTLINE, a witness on behalf of de- 
fendant, being first duly sworn, testified as follows : 

DIRECT EXAMINATION 
My name is Claude Bistline. I live at Pocatello. I 



Park Lusk 169 

have lived there thirty-five years. My business is retail- 
ing lumber, hardware and implements with the Bistline, 
Incorporated. I am President of the company. I have 
known Park Lusk for possibly fifteen years and have 
had business transactions with him. I have sold him 
farm machinery. I sold him a grain drill on August 24, 
1927, for $200.00; on October 1, 1927, I sold him a used 
combine for $471.58; on April 30, 1928, I sold him an 
eight bottom, 16 inch gang plow for $118.46; on June 
28, 1928, a used mower for $45.00; on October 5, 1932, 
another combine for $625.00. I have called on him on 
his wheat farm, mostly in the fall I have probably seen 
him on his place once or twice every year for possibly 4 
or 5 years during this depression, during the harvest time. 
I don't believe I can remember seeing him at work. Har- 
vesting would be going on and the combine would be run- 
ning. I have hired him to run a combine. I was not 
there when he was running it. I have paid him for run- 
ning a combine. I have no note of what we paid him per 
day. The going wage for combine work varies from 
year to year. In 1931, it was $2.00 per acre. That is 
combine work, but I can't tell you what we paid him per 
day. 

CROSS EXAMINATION 

My agreement with Lusk for running the combine at 
$2.00 per acre was coupled with the contract of sale of 
a machine. What he earned was to be applied toward 
the purchase of the machine. I was interested in seeing 



170 United States of America vs. 

it paid for. I was pounding him on the back to hurry 
his work. I was not out there, but had some other man 
there with him. I made an allowance for his horses. I 
know where the money came from in all instances. Mr. 
Lusk has paid for nearly all of his purchases. There is 
still some balance due. I know the source of his money 
used in paying for the machinery. To pay for a portion 
of the plow I hauled grain off the fields. I can't tell you 
the exact amount. The same thing was true of the other 
payments. I did no work on the place, but I have been 
out once or twice a year for the last four years on collec- 
tion work. I was never there very long. 

REDIRECT EXAMINATION 

The payments for a great deal of this machinery were 
made in wheat. I bought considerable wheat in the same 
way. 

DR. CHARLES H. SPRAGUE, a witness on behalf 
of the defendant, testified by way of deposition, as fol- 
lows: 

My name is Charles H. Sprague. I practice medicine. 
I live at Broadlawns Hospital, Des Moines, Iowa. I 
graduated from the Jefferson Medical College, Philadel- 
phia, Pennsylvania, in 1914, with a degree of Doctor of 
Medicine. Since that time I have taken a great deal of 
special work in my profession, — three years interneship 
in the Pennsylvania Hospital at Philadelphia, Rockefeller 
Foundation course in military surgery University of Cal- 



Park Lusk 171 

ifornia, 1918, Two months Harvard Medical School 
1920, two months University of California, 1922, one 
month Columbia University, 1931. I have been prac- 
ticing my profession constantly since 1914. At present 
I am medical director and superintendent of the Broad- 
lawns Hospital at Des Moines. I have specialized in in- 
ternal medicine and diagnosis. I was located at Pocatello 
a couple of months before the war and was absent about 
two years during the war and resumed practice there in 
August, 1919, and continued until November 25, 1925. 
During that practice in Pocatello, I examined some ser- 
vice men. From 1919 to 1925, I was connected with the 
War Risk Insurance and later the Veterans' Bureau. 
During the war I was in service in my professional capa- 
city. I personally remember Park Lusk and of making 
a physical examination of him. I do not recall the exact 
date. Exhibit A, purporting to be a report of the physi- 
cal examination of Park Lusk bears my signature. It is 
a report of the physical examination which I made of the 
plaintiff written at the time of the examination. I have 
refreshed my recollection. My examination was made 
October 23, 1922 in my office at Pocatello, Idaho. When 
Mr. Lusk first came into my office I took his history, 
both before his service and the history of his family and 
himself while he was in the service, and the history after 
the service, and his present trouble. Then asked him 
what he complained about and made a very careful, thor-. 
ough physical examination. He was stripped for the ex- 



172 United States of America vs. 

amination. His complaints were at that time, — he had 
some decayed teeth, a good many teeth extracted, that he 
felt a choking sensation when he was in a close room and 
dust otherwise he had no complaints. On directly asking 
him the various questions, the only complaint he had at 
that time were his decayed teeth and the choking sensa- 
tion. As a result of this examination I made the finding 
that he was a very robust looking man, a good ruddy 
complexion ; he was active, well developed and nourished, 
69y2 inches tall, weighed 151 pounds, which was his usu- 
al weight, and his temperature was 98.6, that is a normal 
temperature. An examination of all the various systems, 
his scalp, head, nose and throat, lymphatic lungs, circu- 
lation, stomach, bowels, genito-urinary and nervous sys- 
tems, bone and joint, skin, internal secretions were all 
perfectly normal. The only thing that needed care was 
teeth — replacement of teeth which had been extracted 
in service. I found nothing wrong with him except bad- 
ly decayed teeth. That is the only thing he complained 
of. He said he was a farmer working on his farm at 
Pauline, Idaho. That had been his occupation before 
service. I found nothing with reference to his physical 
condition which would keep him from carrying on in the 
farming occupation. 

"Q. Doctor, having in mind your examination 
of Park Lusk on October 23, 1922, and taking into 
consideration your medical education and experience 
and bearing in mind that total disability is defined 



Park Lusk 173 

as a disability which renders it impossible for the 
person suffering from it to follow continuously any 
substantially gainful occupation and that the word 
continuously as used in this definition has been de- 
fined by the courts as meaning the ability to work 
with reasonable regularity and that such total disa- 
bility is deemed permanent when it is founded upon 
conditions which make it reasonably certain that said 
disability will continue throughout the lifetime of 
the person disabled, do you have an opinion as to 
whether or not Park Lusk was totally and perma- 
nently disabled on the date of your examination Oc- 
tober 23, 1922." 

''A. I do have. 

Q. What is that opinion. Doctor? 

A. That he was not. 

Q. Doctor, will you mention some occupations 
with which you are familiar and which the plaintiff 
could have carried on on the date of your examina- 
tion October 23, 1922? 

MR. LAMPERT : Waive that objection. 

A. He had no physical disability whatever or any 
disability that would prevent him carry on in any oc- 
cupation, particularly that of farming." 

CROSS EXAMINATION 
I was employed by the War Risk Insurance Bureau on 



174 United States of America vs. 

October 23, 1922. It was the Veterans' Bureau at that 
time and later became the Veterans' Administration. For 
that service I was paid by the government. I had a pri- 
vate practice at that time. At that time I was a commis- 
sioned officer in the PubUc Health Service Reserve and 
was paid the same pay allowance as a captain in the ar- 
my. I was not paid anything extra for these examina- 
tions. He told me he was discharged from the army on 
May 9, 1919. He gave me a history of having been in 
the hospital while in service. He said he had pneumonia 
at Mesbes Hospital in France in October and November, 
1918, for nine weeks, but he went back to duty perfectly 
well. No other sickness, accidents or injuries in service. 
He did not give me any history of being in the hospital 
in October, 1918, because of acute diarrhea; he was in 
the hospital in October, 1918, with pneumonia. He did 
not mention having acute diarrhea in October, 1918, but 
he said he had pneumonia at that time. I do not have 
the service record of the plaintiff while he was in service, 
only my own notes. No x-ray examination was made; 
there was none indicated. Plaintiff's complaint of a chok- 
ing sensation evidently was very insignificant because 
in my office, it was a very close room and warm, and he 
had no complaint at all. My opinion is that it is largely 
an imaginative symptom. The choking sensation which 
people experience, under these circumstances, is almost 
always imagination unless there is some physical defect 
to explain it, which this man did not have. I made an 



Park Lusk 175 

examination for tuberculosis, and followed the usual 
technique used by an expert in tuberculosis work, — pal- 
pation, which is feeling of the patient, inspection by look- 
ing at the chest. I found that his chest was broad and 
deep and moved normally in all directions. Palpation, feel- 
ing with the hands, revealed nothing abnormal; percus- 
sion, tapping with the fingers, showed that his chest was 
normal, and by listening with the stethoscope thoroughly 
in all parts of the lungs showing that it was perfectly 
normal. I did not withdraw any blood. His eyes were 
perfectly normal at that time. I made just one examina- 
tion of the plaintiff. I made the usual examination of his 
eyes and then I referred him to a specialist. I found 
nothing in examination of plaintiff's eyes that caused me 
to send him to a specialist for further examination, but I 
do that in all cases. He had a little rash on his skin, a few 
little spots on his right shoulder — the only skin lesions 
he had. He had no complaint as to nervousness at all. 
He did not complain of any coughing. He had no cough. 
I asked him if he had a cough and he said he didn't. He 
told me nothing further about his nine weeks illness in 
service with pneumonia except that he was in the hospital 
nine weeks and went back to duty and was perfectly all 
right and that he had no other sickness or accident in 
service. It usually takes two or three weeks to recover 
from a seige of pneumonia. It is not true that chronic 
bronchitis and pulmonary tuberculosis often follow a 
history of a bad case of pneumonia. In my practice I 



176 United States of America vs. 

have not seen many cases where the prior history will 
show pneumonia with a later history of chronic bron- 
chitis. There are few of those cases, if any. They are 
associated with pneumonia. There is hardly such a thing 
as chronic bronchitis. Abdomen seemed to be normal. 
His alimentary tract was perfectly normal. He had no 
scars, his abdomen showed well muscled and no masses, 
hernia and no points of tenderness. I found no evidence 
of gastro-intestinal poisoning from gas. There is no such 
thing. There is such a thing as gas poisoning. 

REDIRECT EXAMINATION 

At the present time I am not connected with the Vet- 
erans Administration. 

DR. G. E. RIGGS, a witness on behalf of the defend- 
ant, testified by way of deposition, as follows : 

My name is G. E. Riggs. I am a duly licensed and 
practicing physician. I graduated from the Medical De- 
partment of the University of Oregon in 1911. At pres- 
ent I am connected with the United States Veterans Ad- 
ministration Facility, Memphis, Tennessee, as chief sur- 
geon. I do not hold any other medical position. I have 
been engaged in the practice of medicine since 1911. I 
have specialized in surgical and orthopedic conditions 
since 1915. 1 have examined the medical report covering 
examination of Park Lusk and my memory is refreshed 
so that I can testify as to the condition in which I found 
him at the time I examined him as reflected by the report 



Park Lusk 177 

which bears date 9/21/31. Photophobia means some de- 
fect in the vision. I made an examination of Park Lusk. 
When he came to the hospital his main complaint was 
stomach trouble and my examination was directed to this 
complaint. I made an examination of the man by exam- 
ining him physically with special reference to any abdom- 
inal pathology that might be present. After I had com- 
pleted my physical examination, x-rays were made and I 
examined them as a part of the physical examination to 
correlate the findings. I found that he was, — 

"He was a man of short stature, with fairly nor- 
mal weight for his height, weighing about one hun- 
dred and forty-five or one hundred and fifty pounds, 
being around five feet six inches in height; normal 
built for his height; there was no gross abdominal 
enlargement of any of the viscera ; there were no ten- 
der areas, or any evidence clinically that I could de- 
termine of any gross pathology of the abdomen; he 
gave a history of being constipated and of having 
pains at times in the abdomen and that he occasion- 
ally vomits after meals. These conditions I could not 
determine clinically. The x-ray findings showed no 
gross evidence of any tumors in the abdomen or any 
ulcers in the stomach ; the only evidence of any path- 
ology from an x-ray standpoint was that the large 
bowel was moderately dropped into the pelvis from 
its normal position. This in itself would probably 
account for the complaint of constipation. In the 



178 United States of America vs. 

clinical picture, there was some tendency for a high- 
ly reacting skin, which would indicate moderate 
toxicity of the general system, and this also would 
confirm the possibility that this was due to auto-in- 
toxication." 

As to the foot condition, this man had what is common- 
ly called "Athlete's feet" and it was simply a matter of 
cleanliness and not a disease per se. There was no clini- 
cal evidence demonstrable that the man could not work. 

"Q. From the examination which you made of 
his personally, after first having heard what his com- 
plaints were, and from the examination which you 
made of the x-ray pictures taken of him, did you 
find that the plaintiff in this case was suffering from 
any impairment of mind or body which in your judg- 
ment would render it impossible for him to follow 
with any degree of regularity any substantially gain- 
ful occupation without injury to his health? 

A. I did not." 

"Q. Now, doctor, in your opinion what sort of 
occupation could this man follow ? 

A. He could follow any occupation for which he 
was personally qualified, or even do manual labor. 

Q. You are not qualified to speak with reference 
to his larangitis or photophobia ? 

A. I made no special examination in regard to 
any ear, eye, nose and throat condition. 



ParkLusk 179 

Q. I take it that your examination was directed 
to his stomach complaint and complaint of his feet. 

A. Yes." 

CROSS EXAMINATION 

I made the examination as a routine measure and not 
knowing personally, at the time that I made the examina- 
tion, that this man had filed a war risk insurance claim 
against the United States government. At the time of 
my examination, I had no means of knowing that he had 
filed suit against the government. The man came to me 
by reference from the receiving officer of the medical ser- 
vice with no notation other than for me to do a surgical 
and orthopedic examination with reference to his com- 
plaints. The examination was written in long hand, the 
original of which is within the Bureau files, and the ex- 
amination from which I have refreshed my recollection 
was signed by me personally and was dictated and typed 
by some stenographer from my written examination. As 
far as I am able to determine, outside of the pathology 
that I have stated in my testimony, the plaintiif is per- 
fectly well and normal in every respect. The amount of 
interference with the following of a substantially gainful 
occupation caused by auto-intoxication that I could de- 
termine was present in this case would be very little in my 
opinion. I found moderate auto-intoxication. I don't 
know anything about plaintiff's educational qualifications 
because I never inquired. For several years it has been 



180 United States of America vs. 

my custom in making my examinations to not depend very 
much on the history given me by the patient. If it were 
true that the plaintiff had a severe case of diarrhea and 
was on a milk diet, during the period that he had the se- 
vere diarrhea and was on the milk diet, he might be un- 
able to work. The man stated that he had cramps in his 
stomach and that he vomited frequently 20 minutes to 
half an hour after breakfast. A man with severe stom- 
ach trouble will vomit at other meals except breakfast, 
so in making my determinations I paid very little account 
to the history which this man gave me. He did report 
that he vomited after supper, but in making the determin- 
ations, the clinical findings and the pathology which pre- 
sents itself is the determining factor in making a diag- 
nosis, and not the history of the patient. It is barely pos- 
sible that one in examining deaf and dumb persons might 
not be able to elicit their history unless he understood the 
sign language. Outside of the pathology that I have de- 
termined was present the plaintiff was normal in every 
respect. I except myself from those engaged in the med- 
ical profession who do take into account the history of 
the patient. My examination was confined to the partic- 
ular disabilities and diseases to which I have testified. As 
to any other disabilities which may have existed, I ex- 
press no opinion whatsoever. 

REDIRECT EXAMINATION 

I gave the plaintiff the regular G. I. Tests. I exam- 
ined the x-ray plates and they were negative. In giving 



Park Lusk 181 

my opinion that this man could follow a gainful occupa- 
tion without impairment to his mind or body I have in 
mind the work or occupation for which he is qualified be- 
cause unless a man has the necessary qualifications there 
are certain jobs that he couldn't handle regardless of 
whether or not he was disabled. 

RECROSS EXAMINATION 

P. J. GERMON, a witness on behalf of the defendant, 
being first duly sworn, testified as follows : 

DIRECT EXAMINATION 

My name is P. J. Germon. I reside at the Boise Bar- 
racks, Boise, Idaho. I am a physician and surgeon. At 
present I am employed by the Veterans Administration. 

"MR. LAMPERT: I will admit his quaHfica- 
tions as a physician." 

I have specialized in the subject of x-rays and have 
had experience with them ever since graduation. We read 
on an average of 800 exposures every month. I interpret 
those x-rays. They are taken imder my supervision. Re- 
ferring to plaintiff's Exhibit No. 11, this is an A. P. view 
of the chest thoracic cavity, involving the thorax, the 
cardiac heart shadow, the upper of the portion of the dia- 
phragm which is represented here by the white shadow 
below the heart. I have not seen this picture before this 
morning. 



182 United States of America vs. 

"The picture that we see here shows the heart 
shadow in normal position and size. We have the 
so-called mixed type. The heart is itself globular due 
to the shape of the chest. The lung field is the dark 
area you see on both sides, the right side and left 
side. This is called the apices the upper portion of 
the lung, which protudes above the collar bone. Both 
are clear. There is no evidence of pathology on ei- 
ther side" 

By pathology I mean disease. The shadow given by 
the bronchial tree on each side on the level with the 4th 
rib' are exemplified by marked white shadows. The black 
shadow shows the lungs. There is a slight increase in 
density here. That means nothing except when they are 
exceedingly marked we make a diagnosis of bronchiecta- 
sis. The lines which radiate in all directions through the 
lungs reach what we call the midzone. There is an inner 
zone close to the inner line between that and the mid zone 
and the outer zone. It comes in contact with the sternum 
on the edge of the picture. This is normal. There is no 
calcification noted there. When it is noted it shows by a 
pea size white area here and there and is not noted on 
either side of the picture. The condition of the bronchial 
area as disclosed by this photograph is they are possibly 
slightly exaggerated. The photograph discloses the 
true condition of the bronchial field of the lung. For a 
picture to show bronchiectasis we have to have special 
substances injected into the lung along the bronchial tree 



Park Liisk 183 

known as lipodal. It is an iodine preparation suspended 
in oil. The heart measurements are normal. It does not 
show any deviation. The lung appears normal in the 
photograph. The lymph channels are all through the sys- 
tem. There is nothing unusual seen in this plate. This 
could be called mild bronchitis, a mild form — a minor 
form. I know Park Lusk. I had occasion to examine 
him. I have seen defendant's Exhibit No. 10, in fact I 
made it myself and it bears my signature. It shows that 
I examined Park Lusk on September 21, 1931. At that 
time I discussed with him the complaints he made. The 
history he gave me at the time was 

"Gassed in Argonne Forest in November, 1918. 
Sent to Melves Base Hospital for 9 weeks. Also had 
pneumonia. Also states he had pneumonia three 
times since service. Had no doctor, but his wife took 
care of him at home in 1920, 21 and 26. Bowel move- 
ments are irregular, two or three days without mov- 
ing. Then he will have diarrhea for two or three 
days, then constipation sets in and he must use laxa- 
tive. No history of jaundice. He also has pain in 
palmar surface of both feet just like a toothache. 
This condition has been present since service. Pain 
in left hip especially if he stoops over and has to quit 
work. Cramps in stomach, usually after breakfast 
or supper, 20 minutes to half an hour after meals un- 
til he vomits. Dizziness. Spells 10 to 15 minutes 
duration. Patient states he is on a milk diet, can 



184 United States of America vs, 

eat meat and vegetables for a period of a week at a 
time without trouble, then it starts again and he has 
to return to milk diet to settle stomach." 

Those were the complaints he made at that time. I 
took his temperature which was 98.6, which is normal. 

''His pulse was 7^ at 10:30 A. M. blood pressure 
one hundred and thirty over eighty; height 68-^ 
inches, weight 145 pounds; standard weight before 
onset of present illness 150 pounds; highest weight 
over past year 155 ; lowest w^eight over past year 145 
pounds. Then I made a physical examination of the 
patient stripped and here is the examination. A well 
developed and nourished white male of 35 years of 
age, of ruddy complexion. Does not appear acutely 
ill, although eyes show some irritation. Conjuncti- 
vitis, mild, bilateral. It is inflammation of the white 
portion of the eyes, in other words they are blood- 
shot and red blood vessels are seen over the white 
part of the eyes." 

That has nothing to do with vision, unless it is ex- 
tremely severe. It does not pain. My history shows the 
eye condition mild. The head, scalp shows beginning of 
alopecia or bald headedness ; hair dark brown ; eyes, pu- 
pils equal, react to light and accommodation, which means 
there is no disturbance in the vision and the centers in 
the brain are accommodating properly. The eyes are ab- 
solutely normal. There is no pain connected with that. 
Nose, normal; tonsils hypertrophic, which means larger 



Park Lusk 185 

than usual. That is probably due to tonsilitis and infiam- 
mation. That is usually not painful and there may be 
times when they become inflamed and cause sore throat. 
The remedy is remove the tonsils, which would take away 
the condition. His tongue coated. Teeth, few missing, 
some caries, has marked pyorrhea, heart normal in size 
and location, no thrills or murmurs. A coated tongue 
would probably indicate that elimination is not normal. 
Caries mean cavities in the teeth. The apex of the heart 
in the 5th interspace within the nipple hne. Abdomen 
flat, muscular. No tenderness or muscular rigidity. 
Small fecal masses palpable in course of descendens and 
signoid. Pyorrhea is a pus condition around the roots 
of the teeth. That pus is sometimes absorbed. The cure 
for that is usually the removal of the teeth and massage 
of the gums so that they can become normal again. By 
palpation there was some small fecal masses palpable in 
course of deceudens and sigmoid. Constipation would 
cause that. Liver and spleen normal. The spleen is one 
of the glands located on the left side of the abdomen just 
below the ribs. At the time of the examination the liver 
and spleen were normal. Inguinal rings, no hernia. Gen- 
italia normal. No hemorrhoids. Skin: multiple little 
scars over the back and chest with few pustules present. 
Some pustules present on the back and on the chest. These 
pustules are known as acne vulgaris and gas does not 
necessarily cause that. Those are caused ordinarily it is 
an autointoxication — absorption from the G. I. Tract, 
such as constipation. Bones and joints apparently nor- 



186 United States of America vs. 

mal. Glandular normal Reflexes, knee jerks present and 
active. Rombergs negative. Extremities apparently 
normal. Scar 3^ inches long extensor side of left arm, 
non symptomatic. The extensors are in the back of the 
arm while the flexors are in front. There were callouses 
palmar surface left foot under the 4th and 5th metatarsal 
phalange, articulation mild. There is pain connected 
with a callous or hardening of the skin. Often when the 
bones are pressed on a callous it will cause some pain. 
This condition w^as on the bottom of the left foot. Unless 
it was exeremely severe it would not cause him to be un- 
able to work and at that time it is only limited. The cal- 
lous can be removed. Those are our actual findings. No 
kidney disease. Nocturia once. He denies any venereal 
history. At the conclusion of this physical examination 
I made a diagnosis of conjunctivitis, mild ; missing teeth, 
caries of teeth, pyorrhea, marked; acne, vulgaris, back 
and chest and shoulders ; cicatrix left forearm, non symp- 
tomatic ; constipation, chronic. Due to his complaint and 
G. I. disturbances and vomiting, I had to make x-rays to 
determine if there is any pathology. At this point de- 
fendant's Exhibits Nos. 15 to 17, inclusive, were offered 
and admitted in evidence without objection. I now have 
in the shadow box a print taken following the fleuro- 
scopic examination of patient. The barium which had 
just been given the patient has dropped into the stomach 
and the white shadow here is the shadow of the barium, 
contrary to this gas which is shown here above the car- 



Park Lusk 187 

diac of the stomach. The black portion is gas. The sto- 
mach is a fish hook type showing no irregularities. In 
order to get a diagnosis all the plates and examination 
have to be taken together in order to get a careful under- 
standing of the case. With this picture alone I couldn't 
make a diagnosis. In itself it is not normal because it is 
taken at a point where the stomach has just done its work 
emptying its contents. We determine the condition by 
the photographs, which do not show any abnormality. 
There are other prints. The next picture was taken af- 
ter the stomach contracted. We have a fairly good cap. 
This one side of the stomach was somewhat irregular on 
contour while this one is smooth and regular proving this 
one is muscular contraction and not a defect. The first 
portion of the small intestine also shows, taking into con- 
sideration the fleuroscope and the two plates here, the 
stomach is normal. From the first and second pictures 

I can determine if the stomach is normal. There is no 
defect present. Both lesser and greater curvatures are 
normal with a fairly well formed cap. Two hours later 
this picture was taken which shows the stomach practi- 
cally empty. There is some barium in the pyloric end of 
the stomach and a small part here in the duodenum. It 
shows the stomach emptying at a normal rate. Then this 
picture was taken an hour later. The stomach is prac- 
tically empty. This last picture was taken at 11 o'clock 

and at 2 o'clock in the afternoon, Exhibit No. 17 was 
taken. It represents the whole of the abdominal cavity. 



188 United States of America vs. 

The stomach is filled by a certain amount of gas, but is 
entirely free from barium. The first portion of the in- 
testine is empty with the exception of the termination. 
There is no irregularity and it is normal. There is no 
abnormality. Twenty-four hours after the patient had 
his first fleuroscope examination in barium we took a 
second fleuroscope in order to locate the barium. At that 
time the stomach is empty. The small gut is entirely 
empty. The colon is moderately well filled. There is no 
abnormality except for the appendix, which is filled and 
beaded, showing some pathology. The beading indicates 
some fecal concretion within the opening of the appendix. 
There is some barium present in the appendix as shown 
by the shadow. 

That was the last picture. The last picture shows no 
abnormality to the colon. The appendix is bad. Some 
say that when the appendix fills with barium it is chronic 
appendicitis, others disagree. We should call it chronic 
when it fills up that way. From the examination I made 
and the history here, this man should be able to work. 
He could do almost any work. Usually when we have 
chronic appendicitis there is pain attached to the condi- 
tion. That is one of the symptoms. Referring to the 
first picture, we usually have a certain amount of gas in 
the stomach after a meal. Not a great deal, but we have 
it. I would say Picture No. 1 shows a normal amount of 
gas. I went over his lungs. 



Park Lusk 189 

"Q. What did you find as to the condition of the 
lungs ? 

A. Lung Examination. Shape of chest, flat. Mo- 
bihty normal. Palpation; No increase or decreased 
fremitus. Percussion, right lung, normal resonance ; 
left lung normal resonance. Right lung, normal ves- 
icular breathing. No rales. Left lung, normal ves- 
icular breathing, no rales. Pulmonary diagnosis, 
none." 
■ There is no scar due to a burn on Mr. Lusk's back. 
The marks are the sequilla or after effects of acne vul- 
garis, the pustular eruption I have described. I have had 
experience treating patients who have been poisoned by 
gas. The patients I have seen are not just gas patients. 
I never came into contact with acute cases, but I have 
had cases which had been gassed. If a man had been 
gassed and burned as a result of gas, he would have a 
scarification of the skin of the area involved. From my 
history here I have not found any scarification as a re- 
sult of gas. In looking over his body in court yesterday, 
I did not see any evidence of scarification as a result of 
gas. It is thought by men who have been in the field that 
usually when a man is burned bad enough by the gas, into 
his tissues, that it shows within six months. If a man 
escaped within six months there is hardly any after effect 
any more than following pneumonia and bronchitis. I 
don't think it would be injurious to this man's health to 
follow the occupation of farmer, based on my examina- 
tion and observation and what I have heard in this case. 



190 United States of America vs. 

CROSS EXAMINATION 

The larger part of the report which I have in my hand, 
being Exhibit No. 10, was made by me. My examina- 
tion covered the man from head to toe at that time. Then 
I referred him to the eye, ear, nose and throat men ; also 
to the surgeon and dentist. Dr. Cowles did work on the 
plaintiff following my own examination. He is the eye, 
ear, nose and throat man. Dr. Riggs made a surgical 
examination independent of mine. Dr. Riggs was a sur- 
geon at the Veterans Bureau at that time. He made one 
surgical examination. I heard his deposition. It was 
limited to the stomach and feet. His report is in ad- 
dition to the other examination. When a patient first 
comes to our institution, he reports to the first medical 
officer. I was not he. That was Dr. F. C. Smith. A 
patient is then given a request signed by Dr. Smith for 
examination. He is then transferred to the hospital to 
the attention of a clinical clerk, who advises one of the 
doctors. In the case of Park Lusk, the clinical clerk re- 
ferred him to me. I took his history. I have it here and 
have read it. The words read here were given to me by 
Mr. Lusk himself in his own way and put here right in 
his presence.. I will say that the words under the para- 
graph on history as appearing in Exhibit 10 are the ex- 
act identical words he used in reporting to me, I think so. 
I am positive that there is nothing omitted from what 
he told me and absolutely positive that nothing was added 
to it. I read about eight hundred plates a month on an 



Park Lusk 191 

average. There is no such thing as weight per man for 
height. That is only a general average. I am 5 feet 1 1 
and % inches and weigh 230 pounds. For that weight 
I should be 6 feet 6 inches, and I am not. The standard 
for 5 feet 6 inches should be about 140 pounds, and 5 feet 
9 inches about 170 pounds. According to the scale and 
measurements, this plaintiff is 68^ inches tall. I know 
nothing of his service record. 

The witness was handed Exhibit No. 3. This exhibit 
gives the man's height as 68 5/8 inches. The scale says 
that the normal weight for a man of that height should 
be 170 pounds, but the individual himself is a unit of its 
own. There is no such thing as standard. This plain- 
tiff measured 68^ inches tall at the time I examined him. 
At the time of my examination, the liver and spleen show- 
ed no abnormality. I limit it to that time. I made a thor- 
ough examination. He had chronic constipation. He 
gave it to me as chronic and I accepted his word for his 
history. It is not unusual to have diarrhea and consti- 
pation alternately and he made that statement to me. I 
have no reason to dispute his word. The man came to me 
and I found constipation and usually the two conditions, 
which are opposite, are not found at the same time. Us- 
ually we have constipation after diarrhea. I know noth- 
ing about the alternation in this case. The pustules on 
the back and chest are due to a germ. I heard the testi- 
mony of plaintiff as to taking his thumb and scaling off 
the skin after the poisoning in France. I do not believe 
that could not occur. I have seen a patient in an acute at- 



192 United States of America vs. 

tack and immediately after poisoning in the war. I was 
in one myself. I was burned on the skin. It showed up 
as a burn immediately after. It took three weeks to clear 
it. I have no definite time for the clearing in other peo- 
ple. I know my own case. Mine was gasoline gas. There 
is a difference as to the time of clearing as to the type 
of gas. Mustard gas will show practically at the same 
time as gasoline. It is an irritant. After contact with 
mustard gas, first we have an irritation of the skin, red- 
ness, and finally a destruction of the skin, depending on 
the degree of the burn. The symptoms of mustard gas 
poisoning are itching, a redness, discoloration of the skin. 
I have never read Keene nor Bechman. I have read Gil- 
christ some. I don't know his latest paper, which was 
mentioned this morning. I have read Gilchrist's first 
research work some years ago, but nothing of late. That 
is new to me. The impression I received at the time of 
reading Gilchrist is that either the man dies from the ef- 
fects of the things, or recovers and has no bad effects 
afterward. I haven't read the paper mentioned this 
morning. In gas burning there would be some local ir- 
ritation, whatever it is, in the eyes and all through, and 
the skin will show some irritation. Watering of the 
eyes is nature's way of allaying the inflammation. If 
you have an irritation you will have a running of the nose 
because one follows the other. Running of the nose does 
not necessarily follow mustard gas burns unless you have 
a severe condition. I do not agree with everything the 
author said. There is some pathology in the G. I. Tract. 



Park Lusk 193 

Exhibit 16, I find chronic appendicitis. The general opin- 
ion is that when the appendix is filled up by the barium 
meal it shows pathology. A normal appendix will not 
fill up nor show any concretion in it. A few medical men 
will disagree. There is no diasgreement when the facts 
are explanatory, as in this case. I suppose there would 
be some disagreement on many points in reading a pic- 
ture. Pain is usually a symptom of appendicitis, determ- 
ined by placing the patient on a table, examining his ab- 
domen, finding symptoms which react to pain. We don't 
depend on a patient's statements in abdominal conditions. 
You need to put pressure on the abdomen. Pain is found 
by pressure and when you get the right spot you have a 
muscular contraction. You can palpate with both fingers 
and where there is pain he will react. It will show in his 
facials the quickest. It is usual to take a patient's history 
first and take it for what it is worth if you have made 
your own deductions and physical examination of the pa- 
tient. We have to have something to start with and we 
accept the patient's symptoms until we find out from our 
own examination. When, after examination, I do not 
find pathology to confirm the patient's statement, we dis- 
regard the statement and rely upon our findings. When 
a patient comes to a medical man we ask their history 
which should build up to the point where they are exam- 
ined and if the patient fails to tell us certain things they 
cannot locate, we cannot be responsible for what he says. 
The patient's statement is not disregarded until found 
dififerent from physical examination. I do not agree with 



194 United States of America vs. 

Dr. Sprague that this patient's trouble is imaginary. I 
do not find the choking condition. I knew nothing of 
Dr. Sprague's examination when I examined this man. 
I can't pass on things I haven't known anything about. 

If it is true that the plaintiff had trouble with working 
in dust or a closed room, it probably would make a differ- 
ence with my opinion. If it were true he was in the poison 
gas area on October 12, 1918, without a mask and im- 
mediately thereafter had pain in his eyes with watering, 
water running from the nose and sneezing attacks of pain 
in the stomach followed by vomiting, followed by diar- 
rhea, which resulted in bronchial pneumonia by October 
25th, my opinion as to this man's condition would not be 
changed as far as my physical examination is concern- 
ed. If I assume those facts, I will have to qualify my 
answer. I will first say, "Yes" and qualify by stating in 
the first place I can't prove the history as given of a man 
carrying a mask and having the mask torn off and taking 
three minutes to put it back and if you ask for an opinion 
I will have to qualify on that. It wouldn't change my 
opinion. 

"Q. You have already answered that it would. 

A. Provided I qualified." 

I am basing my opinion on my findings. There is no sure 
cure for anything. Gas poisoning does destroy tissues 
and there are scars and we have other findings. Pneu- 
monia is not necessarily a result of gas poisoning. It 



Park Liisk 195 

might and it might not, depending on the individual, re- 
sult in a weakened bronchial system. 

REDIRECT EXAMINATION 

I read the complaints to the plaintiff after he had made 
his complaint to me. The name Park Lusk was not sign- 
ed on this paper, but on the original which is on file. It 
was read to the patient. "My answers to question 9 have 
been read to me and I hereby certify that the complaints 
therein recorded are all that I am suffering from to my 
knowledge." Even assuming that this man had been 
poisoned by gas, I would say that at the time I made my 
examination he was able to work. There was clinical 
test made of the contents of plaintiff's stomach. It show- 
ed normal as the gastric content shows no acid. A por- 
tion of the contents of the stomach was pumped out after 
a meal and an analysis made for acid and normal content 
and the gastric juices. Assuming that the tissue in the 
lungs and on the exterior portion of the body had been 
burned by gas, it would be replaced by other tissue. 

RECROSS EXAMINATION 

I haven't seen Colonel Harry Gilchrist's comparative 
study of Word War casualties from gas and other wea- 
pons which was published in 1928. I have a right to 
agree or disagree with Colonel Gilchrist. From my ob- 
servation I have seen no bad effect from so called gas 
poisoning unless a man dies within a short period of time 
after exposure. That's all I can say. 



196 United States of America vs. 

By consent of counsel, Dr. Groom, plaintifif's witness, 
who testified in the case in chief, was recalled. 

''Q. Doctor, this morning on cross examination 
you were asked the question and there was also a 
little discussion pertaining to the same question by 
His Honor, Judge Cavanah, relative to whether or 
not you were subpoenaed for this trial, or at any 
time in these cases, and I think you answered you 
were subpoenaed. I called your attention to that 
matter during the noon recess and you asked to be 
allowed to come back and clear that situation up as 
you misunderstood it, is that correct ? 

A. Yes, sir. 

Q. Will you proceed at this time to explain — to 
make such explanation as you care to give ? 

A. Well, Judge, I was under the impression that 
being directed or asked to attend court and be a wit- 
ness in this case, or any other federal court cases, 
that I might be called in, was really a subpoena. I 
had other things planned and Mr. Lampert told me 
I would be expected to be in court and I should be 
here and I thought that was virtually a subpoena to 
appear in Federal Court, and I am sure I didn't in- 
tend to misrepresent to you or the court or jury that 
I had been notified by the Marshal or anything of 
that kind. I thought that was virtually a subpoena 



Park Lusk 197 

to appear in court and that was the reason for my 
answer to that question. 

THE COURT: You think when counsel 
asked you to come in and testify that was a sub- 
poena ? 

A. I thought any notification from a lawyer to be 
in court at a certain time was virtually a subpoena 
and I gave up a hunting trip and other things in or- 
der to be present here. 

MR. LAMPERT: That is all. 

MR. GARVIN : You didn't know what a sub- 
poena was? 

A. I have never been subpoenaed in Federal 
Court. 

Q. How many war risk cases have you testified 
in for — 

MR. LAMPERT : Object to that as immaterial. 

A. This is the seventh case. 

Q. This is the seventh case you have testified in 
and you have never testified that a man who employ- 
ed you to testify was not totally and permanently 
disabled ? 

A. No, sir. 

Q. Have you ever refused to testify in any cases 



198 United States of America vs. 

because of thus finding they were not permanently 
and totally disabled? 

A. No, sir. 

Q. Do you examine any man on behalf of plain- 
tiff's counsel whom you find not permanently and to- 
tally disabled? 

A. Yes, sir. 

Q. Do you then decline to appear? 

A. You mean on the affirmative side. No, sir, I 
don't. 

Q. When you found them not totally disabled? 

MR. LAMPERT : Object to that. 

MR. GARVIN : You got $25.00 a day for testi- 
fying in this case? 

A. Not $25.00 a day. That included the exrays 
and the exray examination and in some cases it in- 
cludes paying for the ex-ray man to help him get the 
picture taken. 

Q. So that you have even invested some of your 
own money in this case? 

A. No, sir, not in any of these cases that have 
come to trial." 

At this point defendant rests. 

"MR. GARVIN : At the close of all the evidence, 



Park Lusk 199 

if your Honor, please, the defendant moves the court 
to direct the jury to return a verdict in favor of the 
defendant and against the plaintiff on the grounds 
and for the reason that at the close of all the evidence 
there is no substantial evidence upon which a verdict 
for the plaintiff can be predicated and that the evi- 
dence affirmatively shows that on the contrary dur- 
ing all or part of the time that the plaintiff has been 
gainfully employed and has not been permanently 
and totally disabled. 

THE COURT : It is my duty to let this case go 
to the jury and I will refuse to allow the motion. 

MR. GARVIN: Exception, please." 

"COURT'S INSTRUCTIONS TO THE JURY: 

''Gentlemen of the Jury : This case is about to be 
placed in your hands for final determination It is 
an action brought by Park Lusk against the United 
States of America upon a cause of action which he 
has set forth in his complaint and it is upon a policy 
of War Risk Insurance issued to him for the sum 
of $57.50 per month. There appears in his com- 
plaint a statement which he makes and relies upon 
an alleged cause of action. The defendant answers 
his complaint by denying certain allegations and de- 
nying especially that he is entitled to recover the in- 
surance. 

'You will observe there is but one contract of in- 



200 United States of America vs. 

surance sued upon in this action in the sum of $10,- 
000.00 which is payable in monthly installments of 
$57.50 in the event the insured became permanently 
and totally disabled during the time the contract of 
insurance was kept in full force and effect by the 
payment of the stipulated premiums due thereon. 

'I said the suit is based upon a policy of War Risk 
Insurance authorized to be issued under the provi- 
sions of the United States Statutes in which it is pro- 
vided that in order to give to every commissioned of- 
ficer and enlisted man when employed in active ser- 
vice under the War or Navy Departments protec- 
tion for himself and his dependents, the United 
States upon application to the Bureau will grant 
United States Government Life Insurance against 
the death or total or permanent disability of any such 
person. The insurance in case of total and perma- 
nent disability is payable to the insured personally 
and in case of death to his estate or the beneficiary 
named in the policy. 

"Gentlemen, there should be no difificulty in plac- 
ing a proper construction upon the Statute and pro- 
per application of it as to the facts. In this Statute 
the United States obligates itself, where one has en- 
listed in the military service of the United States 
and has complied with the requirements of the stat- 
ute and while the insurance is in full force and effect 
has become totally and permanently disabled, to pay 



Park Lusk 201 

to such insured person the insurance provided for in 
said poHcy of insurance. 

"Now total and permanent disability means any 
impairment of mind or body which renders it im- 
possible for the disabled person to follow contin- 
uously any substantially gainful occupation, and to- 
tal diasbility shall be deemed to be permanent when- 
ever it is founded upon conditions which render it 
reasonably certain that it will continue throughout 
the life of the person suffering from it. 

"I will say to you further that whenever it shall 
be established that any person to whom any install- 
ments of insurance has been paid on the ground that 
the insured has become totally and permanently dis- 
abled has recovered that ability to continuously fol- 
low any substantially gainful occupation, the pay- 
ment of installments of insurance shall be discontin- 
ued and no further installments thereof shall be paid 
so long as such recovered ability shall continue. 

"I will say to you further that even though you 
should find from the evidence that the plaintiff did, 
at times since his discharge from the army, actually 
receive a substantial wage, such finding is not con- 
clusive against him because the War Risk Insurance 
Act provided that any impairment of mind or body 
which renders it impossible for the disabled person 
to follow continuously any substantially gainful oc- 
cupation is total disability ,and in considering wheth- 



202 United States of America vs. 

er or not the plaintiff was able to follow any substan- 
tially gainful occupation, you will also consider 
whether or not he was able to follow it continuously. 
"Mere temporary abihty to follow a substantially 
gainful occupation is not a bar to recovery. 

''Further, gentlemen, before the plaintiff can re- 
cover in this case, he must establish to your satisfac- 
tion by a preponderance of the evidence that he was 
totally and permanently disabled at or before the 
time the policy expired on midnight of June 30, 1919, 
and when I say he must show he was totally and per- 
manently disabled, it does not mean an absolute in- 
capacity to do any work at all but there must be some 
impairment of capacity as to render it impossible for 
the injured to follow continuously some substantial- 
ly gainful occupation and this, gentlemen, must oc- 
cur during the life of the contract of insurance. 

''War Risk Insurance is not a gratuity but an 
agreement wit hthe Government, under certain con- 
ditions, to pay the insured certain sums per month 
if he became totally and permanently disabled while 
the contract of insurance is in force. 

'The burden is upon the one suing on such contract 
to show he was in fact permanently and totally dis- 
abled at some time before the contract of insurance 
lapsed and while it was in fullf orce and effect. 

"Now total and permanent incapacity on the part 
of the plaintiff to follow his prewar occupation is not 



Park Lusk 203 

sufficient to mature his insurance. Mere reduction 
in earning capacity below the average is not suffi- 
cient to mature the contract. To mature the con- 
tract of insurance the earning capacity must be re- 
duced by injury or disease complained of to the point 
where it is not substantially gainful and of course 
must be the result of permanent and total disability, 
that is the disabilities must be based upon condi- 
tions which render it reasonably certain they will 
continue through the plaintiff's life. 

"If the plaintiff worked from time to time at dif- 
ferent employments and at a gainful wage, you may 
take that fact into consideration in determining 
whether or not he had the physical abihty to follow 
a gainful occupation. It is incumbent upon him to 
establish by a fair preponderance of the evidence 
that during that period he was not employed, his 
physical condition was such that he could not have 
been employed continuously in any gainful occupa- 
tion. The mere showing that he was not employed 
during certain periods of time is not in itself proof 
that he was totally and permanently disabled. 

"The mere fact, gentlemen, that the plaintiff may 
have served in the military forces of the United 
States during the World War or that he may have 
suffered injury or disease while in service or while 
the policy was in force and effect is not, of itself, 
sufficient to justify a verdict in his favor unless he 
became totally and permanently disabled during the 



204 United States of America vs. 

life of the policy of insurance. Nor is it sufficient 
that you may believe him now to be or subsequent to 
June 30, 1919 he became totally and permanently dis- 
abled as a result either of such service, injuries or 
disease, or otherwise. Before you can return a ver- 
dict in his favor you must find from the evidence 
and not from any sympathy for his condition, his 
service, or his suffering, either now or at the time 
or at any other time, that he had on or before mid- 
night of June 30, 1919, and while the policy of in- 
surance was in force and effect, reached a stage of 
disability after which he was and continued to be 
and now is unable to follow continuously any sub- 
stantially gainful occupation. 

"Even if you believe from the evidence that be- 
fore midnight of June 30, 1919 and while the poHcy 
was in force and effect, that the plaintiff became to- 
tally and permanently disabled, as defined in these 
instructions, and even if you believe that it reason- 
ably appears, as of that time, he would possibly con- 
tinue to be so totally disabled throughout the balance 
of his life, yet if from the evidence you find that at 
any time after midnight of June 30, 1919 the condi- 
tion of total and permantent disability did not exist, 
you will find for the defendant. In other words, 
even if one does, during the life of the policy, reach 
a condition of disability which appears to be total 
and permanent within the definition I have given 



Park Lusk ' 205 

you, and afterwards, after the policy has lapsed it 
appears that he was restored to a physical condition 
which was either not total disability or if total dis- 
ability was not permanent within the definition I 
have given you, he is not entitled to recover. 

"You must find from the evidence, before plain- 
tiff can recover, that he was totally and permanently 
disabled during the life of the policy and at all times 
since. If you find plaintiff became partially disabled 
during the life of the insurance policy or at any 
time subsequent to that date, it would not entitle 
plaintiff to recover, for, as I have said to you, his 
disability must be both total and permanent and must 
have occurred while the policy was in force and ef- 
fect and he must be now totally and permanently dis- 
abled. 

"The right to recover depends upon the time when 
the total and permanent disability occurred and not 
when the disease or diseases began. One may have 
a disease or disability which may ultimately result 
in permanent and total disability but until he reaches 
a stage in that disease or disability, after which in 
effect he is unable to follow continuously a substan- 
tially gainful occupation, he is not permanently and 
totally disabled within the meaning of the policy, and 
unless he reaches such a stage in the disease or dis- 
ability which causes him to be physically unable to 
follow continuously a substantially gainful occupa- 



206 United States of America vs. 

tion before the lapse of the poHcy of insurance for 
non-payment of premium, he is not entitled to re- 
cover. 

"I think I should say to you in regard to the ex- 
pert testimony given by the doctor witnesses in re- 
sponse to hypothetical questions propounded to him, 
you will consider that and treat it in the same man- 
ner you will treat the other testimony in the case. 
The mere fact it was offered by experts does not 
compel you to take it in preference to any other, 
but instead give it the same consideration, every- 
thing else being equal, as that of any other witness. 
The value of expert opinion depends not only on the 
qualifications of the witness but upon the facts which 
he takes into consideration and upon which he bases 
his opinion. If the facts assumed and which are 
made the basis of the opinion are not established by 
the proof, then the opinion would have no basis upon 
which to rest and would be of no value and in weigh- 
ing such opinion the jury must look and see if the 
facts assumed are established by the proof and not 
take them to be true simply because they are so as- 
sumed, but you will look to the proof to determine 
whether they are proven or not. 

"If you are satisfied from all the evidence that the 
plaintiff became totally and permanently disabled 
while the policy of insurance was in full force and 
effect, it was not necessary for him to make any fur- 



Park Liisk 207 

ther payments of premiums after he became totally 
and permanently disabled and I will say to you fur- 
ther that the plaintiff did not pay any premiums up- 
on his War Risk Insurance policy subsequent to the 
month of May, 1919, and that said policy lapsed 
June 30, 1919, the month of June, 1919, being the 
grace period and it was not thereafter in force and 
effect unless the insured at some time prior thereto 
and while the policy was in force and effect became 
totally and permanently disabled. 

"You are further instructed that if you find from 
the evidence that any witness has testified wilfully 
falsely in regard to any matter, you are to disregard 
all or any part of such testimony, unless you find it 
is corroborated by other testimony in the case. 

"In passing upon the issues in this case, the bur- 
den is upon the one who asserts the facts to establish 
them by a preponderance of the evidence, and the 
burden therefore is upon the plaintiff in this case to 
show by a preponderance of the evidence the cause 
of action set forth in his complaint. A preponder- 
ance of the evidence does not necessarily mean the 
greater number of witnesses but it means the great- 
er weight of the testimony, or the weight before you, 
taken as a whole. 

"In this court it is necessary that all the jurymen 
concur in finding a verdict in this kind of a case. 
There are two forms of verdict which have been pre- 



208 United States of America vs. 

pared. If you find for the defendant you will use 
the one in which there is no blank left. If you find 
for the plaintiff you will use the other form. In the 
first, all you will have to do is have your foreman 
sign it. In case you find for the plaintiff you will 
agree upon the date the permanent and total disabil- 
ity occurred and insert that date upon which the 
plaintiff became totally and permanently disabled in 
the form of verdict. I will hand you the two forms 
of verdict, the complaint and answer. If you desire 
any of the exhibits at any time, you will notify the 
bailiff and the clerk will send them to you. You will 
retire. 

"Subsequently the Jury was recalled by the Judge. 

''Court : Is there anything in regard to which 
you want further explanations as to the law in this 
case or anything in the testimony you want the re- 
porter to read to you, or any matter? 

Foreman : We would like to have read again the 
meaning of total disability. 

"THE COURT : The total and permanent dis- 
ability clause? 

"Foreman : Yes. 

"THE COURT: You understand the plaintiff 
has to establish he is both totally and permanently 
disabled prior to the lapse of this policy which was 
on midnight of June 30, 1919, and while it was in 



Park Lusk 209 

force and effect, that is between the date of its is- 
suance and midnight of June 30, 1919. He has to 
estabHsh both total and permanent disability. The 
definition which applies in this case is total disability 
is any impairment of mind or body which renders it 
impossible for the disabled person to follow contin- 
uously any substantially gainful occupation and total 
disability shall be deemed to be permanent whenever 
it is founded upon conditions which render it reason- 
ably certain that it will continue throughout the life 
of the person suffering from it. 

"That is the definition for both total and perma- 
nent disability which applies in this case and which 
you are to apply to the evidence in this case in de- 
termining whether or not the plaintiff was both to- 
tally and permanently diabled between the date of 
the issuance of the poHcy and the date it lapsed, 
which was midnight of June 30, 1919, which includes 
the grace period of June. The payments were paid 
through the month of May and the law grants a 
month of grace before the policy lapses and that car- 
ried this policy to midnight of June 30, 1919. No 
premiums were paid thereafter and the policy lapsed 
for non-payment of premiums on June 30, 1919. 

"The question for you to decide is whether or not 
the plaintiff was both permanently and totally dis- 
abled between the date of the issuance of the policy 
and the date it lapsed, midnight of June 30, 1919. 



210 United States of America vs. 

"Is there anything further? 

"I might say you are Hmited to the time between 
those dates in determining, under the law and the 
facts of the case, whether the plaintiff was totally 
and permanently disabled as he contends. If he was 
not, and after the lapse of the policy he became per- 
manently and totally disabled, he can not recover. 
These policies cover the time between those dates. 
It is a contract of insurance in which the United 
States has agreed to pay the amount of the policy, 
after determining plaintiff's total and permanent 
disability between the date the policy was issued and 
the lapse of it, and not after the lapse of it. It does 
not insure against total and permanent disability oc- 
curring after the lapse of the policy. 

''FOREMAN : I think we understand that. 

"THE COURT: If there is any other evidence 
you gentlemen want, any matters you want your 
minds refreshed on or anything, if you will call my 
attention to it I will have the reporter read it to you. 

"Foreman: I think we understand a little more 
clearly now. 

"THE COURT : You may retire." 

Verdict returned in favor of the Plaintiff. 

Government granted 60 days time. 



Park Lusk 211 

(Title of Court and Cause) 



ACKNOWLEDGMENT OF SERVICE 
Filed Jan. 27, 1934. 

SERVICE of the foregoing Bill of Exceptions in the 
above entitled cause is hereby accepted and receipt of 
copy thereof acknowledged this 27th day of January, 
A. D., 1934. 

OPPENHEIM & LAMPERT, 

Attorneys for plaintiff. 



(Title of Court and Cause) 



STIPULATION FOR SETTLEMENT OF 

BILL OF EXCEPTIONS 

Filed March 5, 1934. 

IT IS HEREBY STIPULATED AND AGREED, 
That the above and foregoing Bill of Exceptions, which 
has been examined by the attorneys of record for the par- 



212 United States of America vs. 

ties to the above entitled action, may be settled and allow- 
ed as defendant's Bill of Exceptions in the above entitled 
cause, and that the Court may sign the above and fore- 
going certificate. 

Dated this 26th day of February, A. D., 1934. 

J. M. LAMPERT, 

B. W. OPPENHEIM, 

J. B. MUSSER, 

Attorneys for Plaintiff, 
Residence: Boise, Idaho. 

J. A. CARVER, 

United States Attorney for the 
District of Idaho, 

E. H. CASTERLIN, 

Assistant U. S. Attorney for the 
District of Idaho, 

FRANK GRIFFIN, 

Assistant U. S. Attorney for the 
District of Idaho. 

R. L. SLAUGHTER, 

Attorney for the Department of 
Justice, 
Attorneys for the defendant. 



Park Lusk 213 

(Title of Court and Cause). 



CERTIFICATE OF JUDGE TO BILL OF 

EXCEPTIONS 

Filed March 5, 1934. 

I, CHARLES C. CAVANAH, United States District 
Judge for the District of Idaho, and the Judge before 
whom the above entitled action was tried, to-wit: The 
cause entitled Park Lusk, plaintiff, vs. United 3tates of 
America, defendant, which is No. 837 in the Eastern Di- 
vision of said District Court, 

DO HEREBY CERTIFY that the matters and pro- 
ceedings embodied in the foregoing Bill of Exceptions 
are matters and proceedings occurring in said cause and 
the same are hereby made a part of the record therein; 
and that the above and foregoing Bill of Exceptions con- 
tains all the material facts, matters and proceedings here- 
tofore occurring in said cause and not already a part of 
the record therein; and contains all the evidence, oral 
and in writing therein, and is a true Bill of Exceptions, 
and that the above and foregoing Bill of Exceptions was 
duly and regularly filed with the Clerk of the said Court 
and thereafter duly and regularly served within the time 
authorized by law; and that no amendments were pro- 
posed to said bill of exceptions excepting such as are em- 



214 United States of America vs. 

bodied therein; that due and regular notice of time for 
settlement and certifying said Bill of Exceptions was 
given. 

DATED at Boise, Idaho, this 5th day of MARCH, 
A. D., 1934. 

CHARLES C. CAVANAH, 

DISTRICT JUDGE. 



(Title of Court and Cause) 



PETITION FOR APPEAL 
Filed February 19, 1934. 

COMES NOW the above-named defendant, United 
States of America, and says that on or about the 20th 
day of October, 1933, this court entered judgment upon 
verdict of the jury in the trial of the above entitled cause 
against said defendant in which judgment and proceed- 
ings had thereunto in this cause certain errors were com- 
mitted to the prejudice of the defendant, all of which er- 
rors will appar more in detail from the assignment of 
errors, which is filed with this petition. 

And the petitioner further says that said cause was 
brought against said defendant under Title 38, Section 



Park Lusk 215 

445, U. S. C. A. ; that this appeal is sought and brought 
up by direction of a department of the government of 
the United States, to-wit, the Department of Justice, and 
the said defendant in petition herein is acting under the 
direction aforesaid, and no bond for costs, supercedeas 
or otherwise ought, pursuant to Sections 869, 870, Title 
28, United States Code, be taken or required. 

WHEREFORE, the said defendant prays that an ap- 
peal be allowed in its behalf in the United States Circuit 
Court of Appeals for the Ninth Circuit of the United 
States for the correction of the errors so complained of ; 
that said allowance operate as a supercedeas and no bond 
therefor or for costs or otherwise be required and that a 
transcript of the record, proceedings and papers in said 
cause, duly authenticated, may be sent to said Circuit 
Court of Appeals, and that citation issue as provided by 
law. 

J. A. CARVER, 

United States Attorney for the 
District of Idaho, 
E. H. CASTERLIN, 

Assistant U. S. Attorney for the 
District of Idaho, 
FRANK GRIFFIN, 

Assistant U. S. Attorney for the 
District of Idaho. 
R. L. SLAUGHTER, 

Attorney for the Department of 
Justice. 



216 United States of America vs. 

(Title of Court and Cause) 



ASSIGNMENT OF ERRORS 
Filed February 19, 1934. 

COMES NOW, the above named defendant, appellant, 
and files its assignment of errors committed in the trial 
and proceedings of the above entitled cause, to-wit : 



That the Court erred in overruling defendant's demur- 
rer to plaintiff's complaint for the reason that plaintiff's 
complaint is ambiguous, unintelligible and uncertain in 
this, that it cannot be ascertained from the allegations 
contained in Paragraph V. thereof the date that the plain- 
tiff became afflicted with the diseases and disabilities and 
injuries enumerated therein, or the date that the plaintiff 
became permanently and totally disabled or what disease, 
disability or injury enumerated in said Paragraph V 
was permanently and totally disabling. 

11. 

That the Court erred in denying defendant's Motion 
for a New Trial upon the grounds and for the following 
reasons : 



Park Lusk 217 

"That the evidence is insufficient to justify or sus- 
tain the verdict of the jury, in this : That the evi- 
dence does not estabHsh by a preponderance of the 
evidence that the plaintiff was totally and perman- 
ently disabled at the time and while the insurance 
contract was in force and effect; that the evidence 
affirmatively shows that the plaintiff was continu- 
ously engaged in the occupation of farming from the 
time of his discharge from the army, during all the 
years to the present time, and that the evidence fails 
to show that the plaintiff did not receive a substan- 
tial and gainful remuneration and make a fair living 
for all the time so employed." 

"That the court erred in denying defendant's mo- 
tion for a directed verdict at the close of the plain- 
tiff's case, for the reason that the evidence of the 
plaintiff did not sustain the burden of proof required 
by law, in that the evidence failed to establish that 
the plaintiff was totally and permanently disabled 
during the existence of and while the contract of in- 
surance was in full force and effect, to-wit, prior to 
midnight of the 30th day of June, 1919. 

"That the Court erred in denying the motion of 
defendant for a directed verdict in its favor at the 
close of all the evidence, for the reason that there 
was no evidence in the record showing or proving 
that the plaintiff became totally and permanently dis- 
abled while his contract of insurance was in full force 



218 United States of America vs. 

and effect, and at a time prior to midnight of the 
30th day of June, 1919." 

III. 

That the Court erred in overruHng defendant's objec- 
tion to testimony as follows, to-wit : 

"Q. Did he do all his work? 

A. No, he did not. 

MR. GARVIN : Objected to on the same 
ground (it calls for a conclusion of the witness). 

THE COURT: Denied. 

MR. GARVIN: Exception." 

IV. 

The Court erred in ovrruling defendant's objection to 
testimony as follows, to-wit : 

"Q. Would it aid you any by exposure of the 
chest so you might illustrate the things you found ? 

MR. SLAUGHTER : Objected to as incom- 
petent and prejudicial. 

Q. I asked if it would aid him to illustrate and 
make clear his findings and if so — 

THE COURT : He can answer that yes or 
no. 

Q. Would it aid you? 



Park Lusk 219 

A. I think it would. 

Q. Now we would like to ask that the plaintiff 
be stripped and that he have an opportunity to give 
that explanation of his findings. 

MR. SLAUGHTER : Objected to as incom- 
petent and prejudicial. 

THE COURT : Overruled. 

MR. SLAUGHTER: Exception, please." 

V. 

The Court erred in overruling defendant's objection to 
testimony, as follows, to-wit: 

"Q. Then in addition to your findings, based up- 
on your examination and the conditions as you have 
found them, I will give to you certain facts which 
you may assume to be facts, as to the history in the 
case, and I will ask you first to consider as the def- 
inition of total and permanent disability the follow- 
ing : Total disability is any impairment of mind or 
body which renders it impossible for the disabled per- 
son to follow continuously any substantially gainful 
occupation and total disability shall be deemed to be 
permanent whenever it is founded upon conditions 
which render it reasonably certain that it will con- 
tinue through the life of the person suffering from 
it. 

"With that definition and with your findings and 



220 United States of America vs. 

examination, I will ask you to add these assumed 
statements as facts in the history of the case : 

"The plaintiff in this case in the month of Sep- 
tember 1917 entered the miHtary service of his coun- 
try; he went to Camp Lewis while he was under 
training until about the month of April 1918 when 
he came home on a furlough and was married, re- 
maining home a few days at that time and returning 
to Camp Lewis and continuing his training for mili- 
tary service. He arrived at Hoboken, New York 
about July 4, 1918, or a military camp in New Jer- 
sey in the vicinity of New York City, then was taken 
on a transport to Liverpool, England, and after stop- 
ping there approximately two weeks reached France. 
From the time of his entry into the service and up 
until this time he had not been on sick call or had any 
illness of any kind. On or about the 26th day of 
September after two weeks behind the lines, about 
five or six miles, during v/hich time they were await- 
ing orders to go over the top and into active military 
campaign, and during which time he was lying in 
water and mud, his clothes muddy and wet and no 
change of clothes for approximately two weeks pre- 
ceding September 26th until he arrived at a hospital 
— I will now give you the time as being about Octo- 
ber 14, 1918 — That upon going over the to]) so-call- 
ed, he was in the Argonne Forest and in open field 
warfare as distinguished from trench warfare, and 



Park Lusk 221 

he was constantly under fire from the enemy a major 
portion of the time, with wet clothes upon his body, 
many of his company killed around him; that this 
warfare continued in open fighting, they advancing 
some nine miles in about ten days and then on about 
the 10th of October one evening a gas barrage came 
over along with the shell fire. Considerable excite- 
ment ensued, and he being a sergeant was responsi- 
ble with other sergeants with takintg care of the 
horses. The horses required the gas masks the same 
as the humanbeing and the men in taking care that 
— in this confusion he and the other sergeants pro- 
ceeded to aid in the actual masking of the horses, 
and while doing that a horse knocked off the gas 
mask of Park Lusk, which he was wearing at that 
time, and due to the excitement and jumping around 
of the horse which he was handling at that time, it 
was some three or four minutes before he got his 
gas mask back on, during which time he was inhal- 
ing gas and was in the midst of that gas barrage. 
Within a few moments thereafter he became uncon- 
scious. His estimate of his unconsciousness is from 
forty to fifty minutes. When he recovered he saw 
his associates in the service lyong on the ground 
waiting for the cloud of gas to rise and leave. The 
barrages at that time in this warfare were lasting 
approximately one hour — what they termed a one- 
hour barrage. Thereafter he returned to and with 
his company and continued to work with them, com- 



222 United States of America vs. 

plaining to his commanding officer of cramps in the 
stomach. But preceding that report to his com- 
manding officer and within a few minutes after he 
regained consciousnes he had severe pains in his 
eyes, water running from the eyes, matter running 
from his nose, sneezing, pains or cramps in the sto- 
mach and within three hours he started vomiting. 
These pains and this vomiting condition continued 
with him some three or four days during which time 
diarrhea set in, the exact time being given as three 
or four hours after the gas poisoning. That upon 
reporting to the commanding officer he offered to 
send him to a hospital but he desired to remain with 
his command if he could. He became sicker and 
these complaints I have just spoken of continued and 
the vomiting caused him and the diarrhea caused him 
discomfort. He, within four days time, became so 
sick that he had to permit himself to be transferred 
to a field hospital, he driving several miles on horse- 
back and becoming so weak he could no longer ride 
a horse and he was then transferred to a machine 
gun and continued in that manner to the field hos- 
pital. There he received some pills, and within a 
few days and by October 18 the time he arrived at 
the field hospital being October 14th, and on or about 
October 18th he was transferred from the field hos- 
pital to the base hospital at Meszes, France. There 
he remained for approximately nine weeks or from 
October 18, to December 18, those two dates being 



Park Lusk 223 

approximate ; that while at the base hospital and on 
October 25, 1918 — . First let me say that on Oc- 
tober 25, 1918 the cause of his admission is shown 
as diarrhea acute; that on October 16, the same con- 
dition continued and on October 26th the complica- 
tion as being pneumonia lobar, right upper lobe ; that 
on October 26th the cause of admission is given as 
broncho pneumonia, in line of duty — yes. And from 
that hospitatl the disposition shown was made De- 
cember 18, 1918 to his command. The treatments 
received, or medicine given him consisted of some 
pills and castor oil and also alcohol diluted with wa- 
ter, the alcohol being given to him three times a day 
while he was in the hospital. 

*'He reported to his command with the same pains 
and suffering although he made a statement to the 
officers in charge of the hospital that he desired to 
go back to his company rather than to go to a con- 
valescing hospital, in order that he might get home, 
he having been informed that his command would 
be leaving for home shortly. Thereafter he did re- 
port to his command and was taken to a camp near 
the coast of France, that he hiked to that place, he 
having great difficulty with his shortness of breath 
at that time and being hardly able to move with them. 
They moved approximately nine miles a day. That 
at this camp and after he left the base hospital he 
received medical aid and treatment similar to that 



224 United States of America vs. 

in the hospital through the medical attachments to 
the command. This continued until about March 
1919, the treatment being about the same and the 
pain and suffering being similar to that which I have 
described, the vomiting continuing and the pains in 
the chest, following the period when he is listed as 
having brocho-pneumonia, and all those pains and 
suffering continued from that time to the present al- 
most continually although there is a change in the 
vomiting to the extent that after he was home about 
one year he did not vomit as frequently as he did the 
first year he was home, during which time he threw 
up every breakfast for seven months continuously, 
as well as vomiting on the occasion of his taking 
other meals. 

''He arrived back in the United States the latter 
part of April and was taken to Fort Russell Wyom- 
ing, where he was discharged from military service 
on May 8, 1919. At that time the question was ask- 
ed of him if — as to whether or not he had any dis- 
ability known to him. I will read the question, doc- 
tor. Have you any reason to believe that at the pres- 
ent time you are suffering from the effects of any 
wound, injury or disease, or that you have any dis- 
ability or impairment of health, whether or not in- 
curred in the military service.' Mr. Lusk answered 
that question 'no.' He explained that by stating it 
was not true; that he was suffering as I have already 



Park Liisk 225 

outlined to you and that he misrepresented that fact 
in order that he might get out of the miHtary service 
and go home. 

''An examining physician at the same time of his 
discharge certified that he had carefully examined 
the person named as being Park Lusk and carefully 
recorded the results of the examination and that in 
his judgment and belief he is physically qualified for 
military service. I will withdraw that statement as 
to the attending physician — I read from the wrong 
one. 

"If your Honor will bear with me just a moment, 
I will have this. 

"The examining physician, one James B. Lowrey, 
on May 6th, just two days before his discharge, to 
the questions and answers as to the disability, draws 
a line through them, inserting no answers to the 
questions and then makes this declaration : I declare 
that the foregoing questions and my answers there- 
to have been read over to me and that I fully under- 
stand the questions and that my replies to them are 
true in every respect and are correctly recorded, and 
the examining physician also scratches through the 
statement concerning the wound, injury or disease — 
the nature and location of the wound, injury or dis- 
ease, there being no answer to that question. 

"After his discharge Mr. Lusk immediately pro- 



226 United States of America vs. 

ceeded to his home where he arrived in a day or two 
following his discharge, his home being Cyrstal — 
rather Arbon Valley. There he returns to the home 
of his brother and himself upon a ranch of approxi- 
mately 300 acres, 35 acres of which is in irrigation 
and the rest dry farming land, raising wheat; that 
when he entered the military service he weighed, 
there are various estimates from 165 to 175 pounds; 
that at the time of his furlough back from Camp 
Lwis to his home after he had been in training from 
five to six months, his actual weight with his clothes 
on was 180 pounds; that upon his arrival home he 
weighed 140 to 145 pounds approximately; that he 
had pains in his chest and stomach and attacks and 
pains in his eyes with water running from his eyes 
and from the nose as I have previously described. 

"Before I go on with that I want to call your at- 
tention to one additional matter, Doctor, and that is 
when he first went from the field hospital to the base 
hospital in France on or about October 18, 1918, he 
was unconscious for some four days, during which 
time he was wheeled around from one ward to ano- 
ther, finally coming to in the pneumonia ward of that 
hospital; that just preceding that unconsciousness 
things turned black in front of his eyes and he was 
dizzy. 

"Now upon his arrival home he had frequent oc- 
casions of that blackness and dizziness and dizzy 



Park Lusk 227 

spells, they coming upon him upon occasions such as 
lifting any weight, or raising anything that would 
strain him in the way of extra exertion, following 
vomiting spells and following the inhaling of dust 
from a wheat field or as a result of harrowing or 
plowing, any operations of that kind. That during 
the first seven months after he was home he never 
retained a breakfast, going out within from 15 to 
20 or 30 minutes after he ate and vomiting it out; 
that he had vomiting spells with any extra exertion 
and in connection with his meals other than his 
breakfast throughout this period. That for the first 
four weeks after he arrived home, he attempted no 
work other than . an attempt to milk some cows and 
the ordinary chores on the farm. That in doing that 
on occasions he had this blackness before his eyes 
and became dizzy and went on into the house and 
laid down and someone else came and finished the 
work. That after a period of four weeks he attempt- 
ed to do some haying lasting seven or eight or nine 
days and in that work drove a mower upon which he 
had to be relieved to rest because of pains in his sto- 
mach and chest and the pains increasing in his eyes 
and headaches. That thereafter he attempted to 
plow and while the work was a job of some fourteen 
days or so, he used a gang plow or three plows and 
eight to ten horses, that he could not do it continuous- 
ly, sometimes leaving during the time of doing the 
work during the ordinary working hours of the day 



228 United States of America vs. 

and other times not going back to work — or not go- 
ing out in the morning because of his weakness due 
to the vomiting. At these times he usually laid 
around the house, and would remain in the home try- 
ing to rest. That in the harvesting and running the 
combine — whereas before the war he would handle 
a sack of from 120 to 130 pounds of grain — that the 
sack was reduced half, he states, because and the as- 
sumed facts show, due to its size it was a strain up- 
on him, and in that manner he managed to handle 
the grain to the drill and he drilled a part of some 
thirteen or fourteen days, but not continuously, sim- 
ilar to the plowing. He would have to leave the drill 
and the dust would bother him and he would start 
coughing and he had pains in the chest and stomach. 
He would get off the drill and rest a while and go 
home before the days' work was done, and on other 
occasions he wouldn't go out mornings because of 
his weakened condition following vomiting and those 
things. 

"That in the combine work, as I say, he drove the 
team and he would plow some, especially as I have 
just related relative to plowing and drilling; some 
other man would handle the sacks, tie them and 
throw them off. That on many occasions he would 
stop the combine for from fifteen to twenty minutes 
and get off with a terrible choking f eeling.and cough- 
ing and pains in his eyes and he had blackness at 



Park Lusk 229 

times, it would come before him and he would sit 
down a while and then go back to work, and on other 
occasions he would go home and, and on other occa- 
sions would not go out in the morning at all. That 
first year he lost four days out of a ten day period 
due to the fact he was too weak and unable to con- 
tinue the work. 

"As I have illustrated this first year after he came 
home, practically the same was true of operations 
regarding work each year, laying off and the pains 
and suffering were there, every year thereafter and 
up until the very present moment except in one par- 
ticular — the vomiting has decreased in the number of 
times annually but it is still with him and he has the 
same condition I have heretofore given. Through- 
out this period of time after he came home, he has 
had such severe pains in the chest and been treated 
for pneumonia by home remedies each and every 
year — every winter from the time of the early snow 
and in summer in wet weather, the treatments being 
the application of mustard plasters, which his wife 
or mother or brother applied; that he is constantly 
taking medicine, since he has come home, part of it 
being castor oil and the whiskey and alcohol which 
was prescribed to him in France and which he used 
there in the hospital and which he testified would 
bring relief of the pain and suffering. In addition 
to that in 1925 he was given a prescription by Dr. 



230 United States of America vs. 

Groom for medicine which he has been taking up 
to the present time. That he has made a Hving — a 
fair Hving — through the aid and help of others. On 
the occasion of his Hving at his brother's home, he 
had the assistance of his brother and his wife and 
on his leaving there he had remarried and his wife 
had a daughter 13 years of age and he had a son 9 
and each of these children helped, the plowing being 
done that year on the occasion when he was unable 
to continue, by the two children going into the field 
and doing the work. On other occasions he had help- 
ed the neighbors in the plowing and putting up wood. 
Sometimes his wife worked on the combine handling, 
the sacks when he was driving it and this was be- 
cause he was unable to do that heavier work while 
his wife could. That the harrowing on the farm he 
was unable to do authough he tried, but never after 
the first time because of the dust which would choke 
him so he couldn't breathe and he had great difficulty 
in breathing throughout these years whenever he had 
any hard work to do, such as chopping wood or any 
requiring any exertion at all. He would chop for a 
minute or two and would have to stop to catch his 
breath, then possibly go home. 

"The same situation developed with regard to the 
shortness of breath and the cough in the slaughtering 
of hogs and work in connection with the treating of 
the wheat. This was done by raising the same above 



Park Lusk 23 1 

a barrel and dropping it down and then pulling it out. 
Exerting himself in such a way as pulling it out 
caused him to become very short of breath and to 
choke and cough whenever he undertook it. 

''That in 1931 on July 2nd he stated in an appli- 
cation or claim for insurance benefits for permanent 
total disability that the date his disabiHty began was 
November 1, 1918. The cause of the disability was 
left eye, and stomach and bad feet. Where received 
— in the Argonne Forest. 

"In a statement dated September 25, he gave as 
the nature of his disability claimed left eye and sto- 
mach and teeth. Date disability began was given 
as September 1918 and received in the Argonne For- 
est. 

'T will ask you, based upon these assumed facts 
coupled with your findings and diagnosis, whether 
or not you have an opinion as to the disability the 
permanent and total disability under the definition I 
have given you, as to Park Lusk ? 

A. I have. 

Q. What is that opinion? 

MR. GARVIN : Object to that as incompe- 
tent, invading the province of the jury and 
not a substantial statement of the facts. 

THE COURT : I have my doubts whether 



232 United States of America vs. 

the question does contain a substantial statement 
of the facts. A number of things occur to me 
during this evidence that you haven't covered 
in the question. 

MR. LAMPERT : May I ask at this time to add 
to the statement of facts the work record relative to 
the road work. 

THE COURT : You can add it to the state- 
ment. You can add anything in evidence. There 
has been some exhibits, I think 8, 9 and 10, is 
it, that cover matters that the plaintiff applied 
for compensation. One gives statements made 
by the plaintiff in regard to his physical con- 
dition. There is also evidence as to his weight 
when he enlisted and when he came back. There 
is evidence covering the weight you gave and 
exhibits covering other weights. There seems 
ot be some conflict as to that. There is also evi- 
dence as to the time and amount he worked 
other than you have stated in the question. Some 
of these are very material matters in the evi- 
dence, and are not included in this question. 

"MR. LAMPERT : As to the exhibits— 

THE COURT : You can't embody all the 
evidence. I don't think the law requires that 
but you have to — no one can remember all of 
this evidence complete in every statement and 



Park Liisk 233 

if you make a fair statement it is sufficient. 
Those occurred to me. 

"MR. LAMPERT : Might I call Your Honor's 
attention to the fact that I walked over to the desk 
and read from some of these exhibits the statements 
made by counsel, that being form 579 as to applica- 
tion. 

THE COURT : If you have covered those — 
did you cover them all. There are some things 
I don't recall your covering. 

"MR. LAMPERT: Dr. Kackley, I will ask you 
to add to that statement of facts the following : That 
each year since he came home, beginning with the 
third year after his return, he worked, under his 
brother's direction, on highway work, doing work 
running from four, five or six days annually, save 
and except on two occasions, and as to these nine 
years, from the third year after his return until two 
years ago, when he did that work on the highway, 
he usually drove teams on the scraper for that period 
of four or five days. On one occasion he worked a 
period covering approximately 30 days, his duty be- 
ing that of handling the reins for the team in hauling 
a sHp or f resno. A man rode the f resno at one end 
where he started and he drove to the place where it 
was dumped into the wagon or car, the dumping be- 
ing done by another man. That in connection with 



234 United States of America vs. 

that work he lost time — several days, not continuous- 
ly but at odd times and on another occasion his son 
came from school after school was out and would 
frequently take the lines and finish out the day's 
work for his father. On other occasions when he 
failed to be there at all during these few days I men- 
tioned, it was because of the fact he was sick and 
weak and unable to work and another man used his 
teams. He took them to the place of work and ar- 
ranged for another man to take his place and he then 
came home and laid around the house and rested dur- 
ing the time he was off. 

"That in 1931 he made a statement to the effect 
he was working for himself farming since the ser- 
vice and he said T make a fair living.' He later ex- 
plained and added to that that his fair living was the 
result of aid and support from others and not as a re- 
sult of his own abilities or own work. That in Sep- 
tember 1931, that in addition thereto under date 
of September 21, 1931 the patient states he was 
gassed in the Argonne Forest in November 1918. 
He was sent to the base hospital for nine weeks. That 
he also had pneumonia. It also states he had pneu- 
monia three times since service. He had no doctor 
but his wife took care of him at home. B. M. irregu- 
lar, two or three days without moving, then have di- 
arrhea two or three days, then constipated. It sets 
in and he must use laxatives. No history of jaun- 



Park Lusk 235 

dice. Also had pain in palmar surface of both feet 
just like a toothache. This condition has been pres- 
ent since service. Pain in left hip especially if he 
stoops over and had to quit work. That his present 
complaint is that he has cramps in his stomach, usu- 
ally after breakfast or supper, from twenty minutes 
to half an hour he vomits usually. Had dizziness. 
Spells of 15 to 20 minutes duration. Patient stated 
he was on a milk diet ; that he can eat meat and veg- 
etables for about a week at a time without trouble, 
then it starts again and he has to return to milk diet 
to settle stomach. , 

"That the medical report at this time is of a well 
developed and nourished white male of 35 years of 
age, of ruddy complexion. Does not appear acutely 
ill although eyes show some irritation. Conjuncti- 
vitis, mild, bilateral. Head ; scalp, beginning of alo- 
pecia. Hair dark brown, eyes, pupils equal, react 
to light and accommodation. Nose normal. Tonsils 
hypertrophic, Tongue coated. Teeth, few missing, 
some caries. Apex in fifth interspace within nipple 
line. Abdomen flat, muscular. No tenderness or 
muscular rigidity. Small fecal masses palpable in 
course of decendens and sigmoid. Liver and spleen 
normal. Inguinal rings, no hernia. Genitalia nor- 
mal. Rectal — no hemorrhoids. Skin — multiple lit- 
tle scars over the back and chest with few pustules 
present. Bones and joints apparently normal. Glan- 



236 United States of America vs. 

dular normal. Reflexes, knee jerks present and ac- 
tive. Rombergs negative. Extremities apparently 
normal. Scar 3^ long extensor side of left arm, 
non symptomatic. Callouses palmar surface left 
foot under the 4th and fifth metatarsal phlang, artic- 
ulation mild. No kidney diseases. Nocturia once. 
Denies vereneal history. Diagnosis, conjunctivitis, 
mild, missing teeth, caries of teeth, pyorrhea mark- 
ed. Acne vulgaris back and chest and shoulders. 
Cicatrix left forearm non symptomatic. Constipa- 
tion chronic. Hospitalization during service for 
stomach condition and pneumonia. No, V. B. or 
private hospitals since service. Sick in bed at home 
short periods two or three days on several occasions. 
History of frequent headaches, constipated, takes 
physics two or three times a week. Vomits 20 or 30 
minutes after meals, usually after breakfast. Coughs 
and vomits. Complaint at present is stomach con- 
dition, and eyes get blurry. Has to wear thick soled 
shoes to keep feet from hurting. Feet sweat a lot. 
There is no history or clinical evidence of any joint 
pathology. There is a moderate tinea infection of 
both feet. Diagnosis : Auto intoxication moderate 
from constipation and tonsils. No disease joints. 
Recommend treatment. Eyes, history both tear 
sacs swelling and expressing pus from tear ducts. 
Right is swollen up now. Patient wishes to return 
home and return later if trouble continues. Diag- 
nosis dacryocystitis, bilateral. Nose normal. Throat, 



Park Lusk 237 

chronic tonsilitis. Recommend tonsillectomy; Ears 
normal. Missing teeth, carious teeth, salivary cal- 
culus, yes. Heavy. Pyorrhea moderate advanced. 

"The ex-ray shows aesophagus normal. Large 
fishhook type stomach with no deformity of the 
greater or lesser curvature. The G. C. is four fingers 
below left crest. The cap is in midline, fills up and 
empties. The stomach shows rapid peristalsis. The 
first plate confirm the fluero. Plate 2 shows the sto- 
mach gradually emptying with a fairly well formed 
cap. Plate 3, although a small residue is still left 
in the pyloric end of the stomach shows rapid in- 
vasion of the small tract. The 6 hours plate shows 
the stomach empty. Likewise the greater part of the 
small tract. The ileum located in the mid line over 
the symphysis pubic extends high up to the upper 
border of the promontory of the sacrum and against 
the inner surface of the right innominate. The ce- 
cum is invaded by a mixture of barium and gas. 
The rest of the tract shows no barium. The 24 hour 
fluoroscope shows the stomach and small tract en- 
tirely empty. The colon from the cecum to the sig- 
moid well filled and houstrated. The hepatic flexure 
is rather low, likewise the spleenic flexure is level 
with the left crest showing marked ptosis of the 
transverse colon which dropped into the true pelvis. 
The 24 hour picture shows the same condition with 
the exception that the hepatic and spleenic flexure 



238 United States of America vs. 

have risen to the level of the middle of the body of 
the 3rd lumbar vertebrae, likewise the transverse is 
crossing the body of the 5th appendix is well visual- 
ised, wormlike, beaded. Gastric contents; amount 
obtained 60 cc. Total acidity 64. Free HCL 43. 
Combined HCL 21. Bile 0. Bacteria, diplococci. 
Blood musuc plus. Shape of chest, flat, mobility 
normal. Palpitation — no increase or decreased fre- 
mitus. Percussion, right lung, normal resonance; 
left lung, normal resonance. Auscultation — right 
lung, normal vescicular brathing. No rales ; left lung 
normal vesicular breathing, no rales. General diag- 
nosis based on entire physical condition at that time : 
Tinea epidermophytosis feet bilateral moderate; en- 
teroptosis colon moderate; autointoxication moder- 
ate, from constipation and tonsils. No diseased 
joints. Conjunctivitis mild ; acne vulgaris back and 
chest and shoulders. It asks is he confined to his 
bed and the answer is no. 

"There also appears, doctor, this statement — I am 
now reading a statement from his wife ; This is a let- 
ter written from Cyrstal, Idaho, September 23, 1931 
to the Veterans Hospital at Boise, Idaho. Dear 
Sir : I am writing in regards to my husband Park 
Lusk who is in your hospital at present. 

"There's one thing I'm afraid he'll not tell you 
about. He's a hopeless drinker. Of course he's 
ashamed of it and says he can quit any time but its 



Park Lusk 239 

a proven fact he can't. Now this drinking, I think, 
is also a result of the war or I wouldn't be writing 
you about it. He was a good reliable boy when he 
entered the service and come home a wreck. He 
drank more moderately at first but keeps getting 
worse. All the nine weeks he was in the hospital in 
France they gave him whiskey to keep him quiet and 
of course they drank all they could to keep up their 
nerve and now their bodies require it. So if there 
is anything you can do for this please do it. The 
army surely put that craving in him, now they should 
give him a Keeley cure and take it out. Yours truly, 
Mrs. Park Lusk. 

"With that statement of assumed facts and the 
statements I have heretofore made relating to the 
definition and your findings, do you have an opinion 
as to this man's total and permanent disability. 

A. I have. 

Q. What is that opinion? 

MR. GARVIN: I renew my objection on 
the same grounds as before. 

THE COURT : Have you embodied in that 
question the amounts he received when he was 
furnishing his team and labor on this farm. 

MR. LAMPERT : No, I have not. 

THE COURT: And the number of acres 
under cultivation on the different farms. 



240 United States of America vs. 

MR. LAMPERT : I believe I gave the size of the 
farms but I didn't give the amounts because they 
embodied another factor and there is no evidence in 
the record at this time of his earnings. 

THE COURT: I beUeve he said $2.00 a 
day and 50c for each horse. 

MR. LAMPERT : I am looking, your Honor. 

THE COURT: He said he worked there 
for some time. The whole hinges on whether 
he was able to follow a substantially gainful oc- 
cupation. You are objecting that this question 
does not contain those things. The court is 
called upon to rule upon that question and those 
things occur to me to be in evidence. 

MR. LAMPERT : I will add to that the fact that 
he received, while working on the highway the going 
wage per day for himself and 35c per hour for the 
use of his teams and he supplied one or two teams. 
This is for the highway work, which I have hereto- 
fore mentioned. In order that it may be clear, I will 
also add that the farm he was operating with his bro- 
ther from 1919 to approximately 1926 consisted of 
approximately 320 acres, 35 acres of which were 
irrigated and the rest dry farm land. Then he 
worked I think 320 acres dry farm land which he 
alternated by summer fallow and raising crops on 
approximately one-half each year. 



Park Lusk 241 

THE COURT : Have you embodied in your 
question some testimony relating to his weight 
in the service and after his return? 

MR. LAMPERT: I have, with the exception of 
the thing which he disputes. 

THE COURT : It isn't a question of 
whether it fits in or not. 

MR. LAMPERT : I will add that at the time he 
entered the service, the record shows — that is the 
examiner found his weight to be 142)^ pounds, 
within a month of his enlistment. 

THE COURT: Isn't there some evidence 
from some others that he weighed 143 pounds 
when he returned ? 

MR. LAMPERT: I made it from 140 to 145 
pounds, and I believe that it was that. 

THE COURT: And about 175 and 180? 

MR. LAMPERT : That was when he went into 
the service. 

THE COURT: The service record shows 
142 pounds. There is a conflict in the evidence 
and this man is entitled to that dispute. 

MR. LAMPERT : He gave them this testimony. 

THE COURT: I have got to rule on this 
testimony. The service record shows 143 



242 United States of America vs. 

pounds, some put it higher, but you haven't 
covered this other that he weighed 143 pounds. 
You asked the question didn't he weigh more 
when he came back than when he went in. 

MR. LAMPERT : I felt that I had covered it. 

THE COURT: I am asking you to give 
those figures ? Did you give those figures ? 

MR. LAMPERT: Yes, sir I gave the figures 
170 and 180 pounds when he entered, the 180 on 
April on coming back from a furlough, and 140 to 
145 pounds when he returned from the service. 

THE COURT: That is all in your ques- 
tion? Very well. 

Q. With this a'dditional information. Doctor, do 
you have an opinion? 

A. I do. ' 

Q. What is that opinion? 

MR. GARVIN : I renew my objection. 

THE COURT: Have you put in the 
amounts he earned by his own testimony where 
he received it ? 

MR. LAMPERT : 35c an hour your Honor and 
I first put that in — 35c per hour for the horses. 

MR. SLAUGHTER: While he was work- 
ing on the road he was getting 35c per hour and 



Park Liisk ' 243 

$2.00 per day. Then one time he got 50c a day 
for each horse. 

THE COURT: The road work has been 
put at 50c each for the horses furnished and 
$2.00 per day when working for this lady he 
subsequently married when working on her 
place. 

MR. LAMPERT: I must apologize? 

THE COURT: Will you embody that? 

MR. LAMPERT: I may add that he did about 
fourteen days work in the harvest for which he re- 
ceived $2.00 per day and 50c for each horse fur- 
nished. 

THE COURT: With that addition I will 
overrule the objection. 

MR. GARVIN : Exception please. 

VI. 

The Court erred in overruling defendant's objection to 
testimony as follows, to-wit: 

"Q. You can take your seat. Do you — you were 
present in the room when I gave — you heard the as- 
sumed facts related to Dr. Kackley? 

A. Yes. 

Q. Assuming those facts and the definition of 
permanent and total disability to be, total disability 
is any impairment of mind or body which renders 



244 United States of America vs. 

it impossible for the disabled person to follow con- 
tinuously any substantially gainful occupation and 
total disability shall be deemed to be permanent 
whenever it is founded upon conditions which ren- 
der it reasonably certain that it will continue through 
the life of the person suffering from it. With that 
definition as to total and permanent disability and 
those assumed facts, together with your examination 
and findings as you have stated, do you have an 
opinion as to whether or not Park Lusk the plaintiff 
in this case was totally and — is totally and perma- 
nently disabled? 
A. Yes, sir. 

Q. Do you have an opinion as to whether or not 
he was so totally and permanently disabled on or be- 
fore May 1, 1919? 

A. Yes. 

MR. GARVIN : I object as the witness is not 
qualified to answer and it invades the province 
of the jury and the hypothetical question as 
stated was not a substantial and fair statement 
of the facts. 

THE COURT : Overruled. 

MR. GARVIN: Exception, please. 

VII. 

The Court erred in overruling defendant's objection to 
testimony as follows : 



Park Lusk 245 

"Q. You have stated that you have an opinion 
as to his total and permanent disabiHty preceding 
May 8, 1919, what was that opinion? 

MR. GARVIN: I object as the witness is 
not quahfied to answer and it invades the pro- 
vince of the jury and the hypothetical question 
did not give a fair and substantial statement 
of the facts. 

THE COURT : Overruled. 

MR. GARVIN : Exception." 

VIII. 

The Court erred in denying defendant's motion for 
directed verdict made at the close of plaintiff's evidence, 
which was as follows, to-wit : 

MR. GARVIN : Comes now the defendant at the 
close of the evidence for the plaintiff, the plaintiff 
having rested and moves the court to direct a verdict 
in favor of the defendant on the ground that the evi- 
dence is insufficient to show that the plaintiff became 
totally disabled or permanently disabled or totally 
and permanently disabled at a time when the insur- 
ance policy was in full force and effect and that the 
evidence affirmatively shows that the plaintiff has 
and did follow continuously a gainful occupation 
and a substantially gainful occupation since the poli- 
cy lapsed ; that the evidence affirmatively shows that 
the plaintiff has in fact followed continuously a sub- 



246 United States of America vs. 

stantially gainful occupation during all the years 
since his discharge up to the present time. 

THE COURT : I will have to deny the mo- 
tion for a directed verdict. 

MR. GARVIN: Exception." 

IX. 

The Court erred in denying defendant's motion for 
directed verdict made at the close of all of the evidence 
submitted by plaintiff and by defendant, as follows, to- 
wit: 

"Mr. Garvin: At the close of all the evidence, 
if your Honor, please, the defendant moves the court 
to direct the jury to return a verdict in favor of the 
defendant and against the plaintiff on the grounds 
and for the reason that at the close of all the evidence 
there is no substantial evidence upon which a verdict 
for the plaintiff can be predicated and that the evi- 
dence affirmatively shows that on the contrary dur- 
ing all or part of the time that the plaintiff has been 
gainfully employed and has not been permanently 
and totally diabled. 

THE COURT : It is my duty to let this case go 
to the jury and I will refuse to entertain the motion. 
MR. GARVIN: Exception, please." 

X. 

That the evidence is insufficient to support the verdict 



Park Lusk 247 

and the judgment entered thereon in that the evidence 
does not estabHsh that the plaintiff was or became per- 
manently and totally disabled while his contract of War 
Risk Insurance was in full force and effect, or at any 
time. 

XL 
That the verdict and judgment are contrary to law. 

J. A. CARVER, 

United States Attorney for the 
District of Idaho, 

E. H. CASTERLIN, 

Assistant U. S. Attorney for the 
District of Idaho, 

FRANK GRIFFIN, 

Assistant U. S. Attorney for the 
District of Idaho, 

R. L. SLAUGHTER, 

Attorney for the Department of 
Justice. 



248 United States of America vs. 

(Title of Court and Cause) 



ORDER ALLOWING APPEAL 
Filed February 19, 1934. 
Upon the petition for appeal, accompanied by Assign- 
ment of Errors, heretofore filed herein, it being made 
to appear that said Petition should be allowed and that 
appeal is sought and brought up by direction of a depart- 
ment of the government of the United States, towit, the 
Department of Justice, 

IT IS ORDERED that said petition for appeal be and 
hereby is granted and an appeal allowed. 

DATED this 17th day of February, A. D., 1934. 

CHARLES C. CAVANAH, 

DISTRICT JUDGE. 



(Title of Court and Cause) 



CITATION ON APPEAL 

Filed February 19, 1934. 

THE PRESIDENT OF THE UNITED STATES to 



Park Lusk 249 

PARK LUSK and to OPPENHEIM & LAM- 
PERT and J. B. MUSSER, his Attorneys, 
GREETINGS: 

You are hereby cited and admonished to be and appear 
at the United States Circuit Court of Appeals for the 
Ninth Circuit to be held at the city of San Francisco in 
the State of California within thirty days from the date 
hereof pursuant to Order Allowing Appeal regularly is- 
sued, and which is on file in the office of the Clerk of the 
District Court of the United States for the District of 
Idaho, Eastern Division in action pending in said court 
wherein the United States of America is appellant and 
Park Lusk is appellee, and to show cause, if any there be, 
why the judgment and proceedings in said Order men- 
tioned should not be corrected and speedy justice should 
not be done to the parties in that behalf. 

WITNESSETH: The Honorable Charles Evans 
Hughes, Chief Justice of the Supreme Court of the Unit- 
ed States of America, this 17th day of February, A. D., 
1934. 

CHARLES C CAVANAH, 

DISTRICT JUDGE. 
ATTEST: 

W. D. McREYNOLDS, 
(SEAL) Clerk. 



250 United States of America vs. 

(Title of Court and Cause) 



PRAECIPE FOR 
TRANSCRIPT OF RECORD 

Filed February 19, 1934. 

To the Clerk of the above entitled court : 

Please prepare, certify, print, return and transmit to 
the Circuit Court of Appeals, Ninth Circuit at San Fran- 
cisco, California, transcript of record in the above enti- 
tled cause, including therein 

1. Complaint. 

2. Demurrer. 

3. Order overruling demurrer. 

4. Answer. 

5. Motion for New Trial. 

6. Order denying Motion for New Trial. 

7. Verdict of Jury. 

8. Judgment. 

9. Orders extending time for filing Bill of Excep- 

tions. 

10. Bill of Exceptions. 



Park Lusk 25 1 

11. Petition for Appeal. 

12. Assignment of Errors. 

13. Order Allowing Appeal. 

14. Citation on Appeal. 

15. Praecipe for Transcript of Record. 

16. Minutes of the court. 

showing in each case fact and date of filing and accept- 
ance of service. 

Omit printing of title, court and cause and verification. 

J. A. CARVER, 

United States Attorney for the 
District of Idaho. 

E. H. CASTERLIN, 

Assistant U. S. Attorney for the 
District of Idaho. 

FRANK GRIFFIN, 

Assistant U. S. Attorney for the 
District of Idaho. 

R. L. SLAUGHTER, 

Attorney for the Department of 
Justice. 



252 United States of America vs. 

(Title of Court and Cause) 



ACKNOWLEDGMENT OF SERVICE 
Filed February 19, 1934. 
Service of 

ASSIGNMENT OF ERRORS. 

PETITION FOR APPEAL. 

ORDER ALLOWING APPEAL. 

PRAECIPE FOR TRANSCRIPT OF RECORD. 

CITATION ON APPEAL, 
is hereby accepted and receipt of copies thereof acknowl- 
edged this 19th day of February, A. D., 1934. 

B. W. OPPENHEIM, 

J. M. LAMPERT, 

J. B. MUSSER, 

Attorneys for Plaintiff, 



Park Lusk 253 

(Title of Court and Cause) 



CERTIFICATE OF CLERK 

I, W. D. McReynolds, Clerk of the District Court of 
the United States for the District of Idaho, do hereby 
certify the foregoing transcript of pages numbered 1 to 
253 inclusive, to be full, true and correct copies of the 
pleadings and proceedings in the above entitled cause, 
and that the same together constitute the transcript of 
the record herein upon appeal to the United States Cir- 
cuit Court of Appeals for the Ninth Circuit as requested 
by the Praecipe filed herein. 

I further certify that the cost of the record herein 
amounts to the sum of $253.50 and that the same has 
been paid by the appellant. 

Witness my hand and the seal of said Court this 5th 
day of April, 1934. 

(SEAL) W. D. McREYNOLDS, Clerk. 

Clerk. 



No 

IN THE 

United States Grcuit Court of Appeals 

FOR THE NINTH CIRCUIT 

UNITED STATES OF AMERICA, 

Appellant, ^ 
vs. 
PARK LUSK, 

Appellee. 



BRIEF OF APPELLANT 



Upon Appeal from the District Court of the United 
States, for the District of Idaho, Eastern Division. 

HON. CHARLES C. CAVANAH, District Judge. 

J. A. CARVER, 

United States Attorney 
for the District of Idaho ; 
E. H. CASTERLIN, 
FRANK GRIFFIN, 

Assistant U. S. Attorneys 
for the District of Idaho; 
R. L. SLAUGHTER, 

Attorney, Department of Justice, 
Residence: Boise, Idaho, 
Attorneys for Appellant. 
B. W. OPPENHEIM, 
J. H. LAMPERT, 
J. B. MUSSER, 

Residence: Boise, Idaho, 
Attorneys for Appellee. 



F''«d pi-l^-E-D '1934. 

■ , Clerk. 

MAY lb W'34 —^ 

PAUL P. O'BRIEN, 



IN THE 

United States Circuit Court of Appeals 

FOR THE NINTH CIRCUIT 

UNITED STATES OF AMERICA, 

Appellant, 

vs. 
PARK LUSK, 

Appellee. 



BRIEF OF APPELLANT 



Upon Appeal from the District Court of the United 
States, for the District of Idaho, Eastern Division. 

HON. CHARLES C. CAVANAH, District Judge. 

J. A. CARVER, 

United States Attorney 
for the District of Idaho; 
E. H. CASTERLIN, 
FRANK GRIFFIN, 

Assistant U. S. Attorneys 
for the District of Idaho; 
R. L. SLAUGHTER, 

Attorney, Department of Justice, 
Residence: Boise, Idaho, 
Attorneys for Appellant. 
B. W. OPPENHEIM, 
J. H. LAMPERT, 
J. B. MUSSER, 

Residence: Boise, Idaho, 
Attorneys for Appellee. 



Filed , 1934. 

Clerk. 



INDEX 

Page 

Statement of the Case 9 

Assignment of Errors 1 1 

Statement of the Facts 1 6 

Points and Authorities 24 

Argument 26 



CASES CITED 

Page 
Bowditch V. Boston, 101 U. S. 16, 18 25 

46 C. J. 401, 402, note 75 26 

Giraudi v. Electric Imp. Co. (Cal.), 

40 Pac. 108, 28 L.R.A. 596 26 

Improvement Company v. Munson, 14 idem 442 25 

Inland etc. Coasting Co. v. Tolson, 

139 U. S. 551, 11 Sup. Ct. 653, 

35 L. Ed. 270 : 26 

Jones on Evidence (3d Ed.), page 541, 563 26 

Jones on Evidence (3d Ed.), page 561, note 67 26 

Lake Erie & W. R. Co. v. Schneider (CCA 6), 

257 Fed. 675 26 

Meldram v. Curtis & Bro., 29 Fed. (2d) 582 26 

Merchants Bank v. State Bank, 

10 Wall (US) 604, 637 25 

Nichols V. U. S. (CCA 9), 68 Fed. (2d) 597 25 

Pratt V. North German Lloyd S. S. Co. (CCA 2), 

184 Fed. 303, 33 L.R.A. (NS) 532 26 

U. S. V. Clapp (CCA 2), 63 Fed. (2d) 793, 795 25 

U. S. V. Diehl (CCA 4), 62 Fed. (2d) 343 24 



CASES CITED— (CONTINUED) 

Page 

U. S. V. Kerr (CCA 9), 61 Fed. (2d) 800 24 

U. S. V. Lawson (CCA 9), 50 Fed. (2d) 646 25 

U. S. V. Rentfrow (CCA 10), 60 Fed. (2d) 488 24 

U. S. V. Wilfore (CCA 2), 66 Fed. (2d) 255 25 



IN THE 



United States Circuit Court of Appeals 

FOR THE NINTH CIRCUIT 



UNITED STATES OF AMERICA, 

Appellant, 
vs. 
PARK LUSK, 



BRIEF OF APPELLANT 



Upon Appeal from the District Court of the United 
States, for the District of Idaho, Eastern Division. 



HON. CHARLES C. CAVANAH, District Judge. 



STATEMENT OF THE CASE 

This action was brought by the Appellee, plaintiff be- 
low, to recover on a War Risk Insurance policy. The 
action was filed January 16, 1932 (Tr. 9). Total and 
permanent disability is claimed because of general neu- 
rosis from shell shock, gastro-intestinal poisoning from 
gas, chronic bronchitis, laryngitis from gas poisoning 
and photophobia. The appellant, defendant below, an- 
swered the complaint on January 11, 1933 (Tr. 16), ad- 



10 

mitting and denying, and alleging as a special defense 
that the action was barred by provisions of Title 38, Sec- 
tion 445, U. S. C. A., as amended July 3, 1930, and alleg- 
ing that the court is without jurisdiction of the subject 
matter for the reason that the complaint was not filed 
within the time allowed by 38 U. S. C. A. 445, as amended 
July 3, 1930. 

The issues thus joined were tried to the court and jury 
on October 18, 1933 (Tr. 35). At the opening of the 
proceedings, it was stipulated that the plaintiff entered 
the military service of the United States on September 
17, 1917; that he was discharged therefrom May 8, 1919; 
that the insurance policy was issued and became effective 
April 25, 1918; that premiums were paid on the policy to 
and including the month of May, 1919; that the pohcy 
was effective until June 30, 1919; that a disagreement 
exists ; that residence is admitted ; that the court has juris- 
diction of the cause of action. The remaining material 
issue was the question of total and permanent disability 
from the alleged causes from a time within the effective 
dates of the said policy. 

At the close of plaintiff's case (Tr. 163), the defendant 
moved for a directed verdict, and again at the close of all 
of the evidence (Tr. 198) the defendant moved for a 
directed verdict. In both instances the motion was de- 
nied. 

The jury returned a verdict in favor of the plaintiff, 
fixing the date of total and permanent disability as June 



11 

29, 1919. On this verdict judgment was entered in favor 
of the plaintiff on October 20, 1933 (Tr. 29-32). On 
October 29, 1933, a motion for a new trial was filed by 
the appellant (Tr. 19) and the same, after argument, was 
denied by the court on January 9, 1934 (Tr. 22). From 
the proceedings and judgment below, the appellant prose- 
cutes this appeal. 

ASSIGNMENT OF ERRORS 

I. 

The Court erred in overruling defendant's demurrer to 
plaintiff's complaint for the reason that plaintiff's com- 
plaint is ambiguous, unintelhgible and uncertain in this, 
that it cannot be ascertained from the allegations con- 
tained in Paragraph V thereof the date that the plaintiff 
became afflicted with the diseases and disabilities and in- 
juries enumerated therein, or the date that the plaintiff 
became permanently and totally disabled or what disease, 
disability or injury enumerated in said Paragraph V was 
permanently and totally disabling. 

II. 

The Court erred in denying defendant's motion for a 
new trial upon the grounds and for the reasons set forth 
in the Assignment of Errors, (Tr. 216-218), reference 
to which transcript is hereby expressly made for further 
particulars. 



12 

III. 

The Court erred in overruling defendant's objection to 
testimony as follows, to-wit : 

"Q. Did he do all his work? 
A. No, he did not. 

MR. GARVIN : Objected to on the same ground, 
it calls for a conclusion of the witness. 
THE COURT: Denied. 
MR. GARVIN: Exception." 

IV. 

The Court erred in overruling defendant's objection to 
testimony as follows, to-wit : 

"Q. Would it aid you any by exposure of the 
chest so you might illustrate the things you found? 

MR. SLAUGHTER: Objected to as incompe- 
tent and i)rejudicial. 

Q. I asked if it would aid him to illustrate and 
make clear his findings and if so — 

THE COURT : He can answer that yes or no. 

Q. Would it aid you? 

A. T think it would. 

Q. Now we would like to ask that the plaintiff be 
stripped and that he have an opportunity to give that 
explanation of his findings. 

MR. SLAUGHTER: Objected to as incompe- 
tent and prejudicial. 



13 

THE COURT: Overruled. 

MR. SLAUGHTER : Exception, please." 

V. 

The Court erred in overruling defendant's objection to 
testimony set forth in full in the Assignment of Errors, 
Tr. 219-243, which includes a hypothetical question, ref- 
erence to which transcript is hereby expressly made for 
further particulars. 

VI. 

The Court erred in overruling defendant's objection to 
testimony as follows, to-wit : 

"Q. You can take your seat. Do you — you 
were present in the room when I gave — you heard 
the assumed facts related to Dr. Kackley? 

A. Yes. 

Q. Assuming those facts and the definition of 
permanent and total disability to be, total disability 
is any impairment of mind or body which renders it 
impossible for the disabled person to follow contin- 
uously any substantially gainful occupation, and 
total disability shall be deemed to be permanent 
whenever it is founded upon conditions which ren- 
der it reasonably certain that it will continue 
through the life of the person suffering from it. 
With that definition as to total and permanent dis- 
ability and those assumed facts, together with your 



14 

examination and findings as you have stated, do you 
have an opinion as to whether or not Park Lusk, 
the plaintiff in this case, was totally and — is totally 
and permanently disabled? 
A. Yes, sir. 

Q. Do you have an opinion as to whether or not 
he was so totally and permanently disabled on or 
before May 1, 1919? 

A. Yes. 

MR. GARVIN: I object as the witness is not 
qualified to answer and it invades the province of 
the jury and the hypothetical question as stated was 
not a substantial and fair statement of the facts. 

THE COURT: Oevrruled. 

MR. GARVIN: Exception, please." 

VIL 

The Court erred in overruling defendant's objection to 
testimony as follows : 

"Q. You have stated that you have an opinion as 
to his total and permanent disability preceding May 
8, 1918, what was that opinion? 

MR. GARVIN: I object as the witness is not 
qualified to answer and it invades the province of the 
jury and the hypothetical question did not give a fair 
and substantial statement of the facts. 

THE COURT: Overruled. 

MR. GARVIN: Exception." 



15 

VIII. 

The Court erred in denying defendant's motion for 
directed verdict made at the close of plaintiff's evidence, 
which was as follows, to-wit : 

"MR. GARVIN : Comes now the defendant at 
the close of the evidence for the plaintiff, the plaintiff 
having rested, and moves the court to direct a verdict 
in favor of the defendant on the ground that the evi- 
dence is insufficient to show that the plaintiff became 
totally disabled or permanently disabled or totally 
and permanently disabled at a time when the insu- 
rance policy was in full force and effect and that the 
evidence affirmatively shows that the plaintiff has 
and did follow continuously a gainful occupation, 
and a substantially gainful occupation, since the pol- 
icy lapsed ; that the evidence affirmatively shows that 
the plaintiff has in fact followed continuously a sub- 
stantially gainful occupation during all the years 
since his discharge up to the present time. 

THE COURT: I will have to deny the motion 
for a directed verdict. 

MR. GARVIN : Exception." 

IX. 

The Court erred in denying defendant's motion for 
directed verdict made at the close of all of the evidence 
submitted by plaintiff and by defendant, as follows, to- 
wit: 



16 

*'MR. GARVIN : At the close of all the evidence, 
if your Honor please, the defendant moves the court 
to direct the jury to return a verdict in favor of the 
defendant and against the plaintiff on the grounds 
and for the reason that at the close of all the evidence 
there is no substantial evidence upon which a verdict 
for the plaintiff can be predicated and that the evi- 
dence affirmatively shows that on the contrary during 
all or part of the time that the plaintiff has been 
gainfully employed and has not been permanently 
and totally disabled. 

THE COURT : It is my duty to let this case go 
to the jury and I will refuse to entertain the motion. 

MR. GARVIN : Exception, please." 

X. 

The evidence is insufficient to support the verdict and 
the judgment entered thereon, in that the evidence does 
not establish that the plaintiff was or became permanently 
and totally disabled while his contract of War Risk Insu- 
rance was in full force and effect, or at any time. 

XL 

The verdict and judgment are contrary to law. 
STATEMENT OF THE FACTS 

After five or six weeks with the reserves (Tr. 74), the 
plaintiff as a sergeant (Tr. 91 ) commenced his active ser- 
vice on September 26, 191<S (Tr. 74). Prior to this time. 



17 

plaintiff claims no disability. Excepting the wet and 
muddy condition of the field and wading the Marne three 
times (Tr. 75), plaintiff went through the usual experi- 
ences of an active soldier until October 10, 1918, when he 
received gas (Tr. 76) for the reason that his mask was 
knocked off by a horse during a gas attack. Despite this, 
plaintiff went on in the active duties of a soldier until Oc- 
tober 14, 1918, when he was taken by ambulance to a 
field hospital (Tr. IT). After about four days here, he 
was removed to a base hospital and on December 18, 
1918, plaintiff was discharged to duty (Tr. 93). Plain- 
tiff then went to his company at Ige, where he remained 
until the middle of March, 1919. He did not perform 
the duties of a sergeant or do any work subsequent to his 
discharge (Tr. 7%'). He then hiked with the boys to St. 
Lazaire (Tr. 79), whence he was returned to the United 
States and mustered out at Camp Russell on May 8, 1919. 
After explaining the pains and suffering through which 
he went, plaintiff was asked, "Have these pains and suf- 
fering been with you continuously since the gassing, or 
have they been relieved for months at a time or for longer 
periods or any period since," to which he answered, 
"Yes." (Tr. 78). From this it is impossible to deter- 
mine what plaintiff claims in respect of his pains and suf- 
fering. Plaintiff alleges his disabilities on the grounds 
of general neurosis from shell shock, gastro-intestinal 
poisoning from gas, chronic bronchitis, chronic laryngitis 
from gas poisoning and photophobia (Tr. 11). 



18 

Shortly after his discharge, plaintiff returned to his 
home and the record shows that during the year 1919 he 
worked some (Tr. 53). Plaintiff drilled grain for about 
two weeks, although he did not work every day (Tr. 59, 
84). He pushraked hay for six or seven days and "may 
have" lost one or two days (Tr. 59, 83, 82). He also 
plowed, using eight horses (Tr. 82). He did road work 
with a grader for possibly five to ten days, receiving 35c 
an hour for his team and having from four to eight head 
of horses engaged in this work (Tr. 64). He worked 
with a combine for a week or more (Tr. 55, 59, 83, 101). 
In later years he stayed with his work on the combine 
better (Tr. 86). Following this he did chores (Tr. 81). 
He helped his brother operate a ranch on a 50-50 basis 
from the time he returned home until either 1926 or 1927 
(Tr. 85, 102). The ranches varied in size, but with the 
exception of an extra man in the spring, the two brothers 
did practically all of the work on the ranches during this 
period. 

In 1920, plaintiff again engaged in road work. This 
road work continued through eight or nine years and 
would average five or six days a year. While on this job, 
he worked steady one day after another and on more 
than one occasion worked longer than five or six days. 
This work consisted of driving a team and following the 
scraper, which was loaded and dumped by men hired for 
that purpose (Tr. 88). He worked on the harvester for 
five days (Tr. 37), driving a team of twelve horses nine 



19 

hours a day (Tr. 39). He was three days off. The gen- 
eral farm work in which he was engaged in 1919, ex- 
cepting harrowing, was followed out this year (Tr. 54, 
60-62, 65). In the fall he got wood and helped in the 
feeding. 

In 1921 the general farm work (Tr, 54, 60) and the 
road work (Tr. 64) continued as during the previous 
years. The general farm work went on in 1922 as well 
as 1923 and 1924. 

In 1925 plaintiff worked in a gravel pit with four 
horses for thirty days and did the work which was as- 
signed to him (Tr. 39, 40, 49, 63). This year he also did 
ditching for about one month (Tr. 40, 42). He also 
plowed and did the general farm work as in the previous 
years (Tr. 40, 54, 60). The general farm work contin- 
ued in 1926 and 1927. During the latter year, he cut 
feed and hay for three or four weeks for the present 
Mrs. Lusk, being off about two-sevenths of the time (Tr. 
67, 103). The occasions of his being off were not due to 
weather conditions entirely, but he would take his help 
and leave the work (Tr. 67). During this year, which 
was subsequent to his partnership work with his brother, 
plaintiff operated two ranches (Tr. 67, 70). These two 
ranches he has operated up to the present time. Each 
ranch is cropped on alternate years, wheat being the prin- 
cipal crop and there being an average of 140 acres of 
wheat each year. During this year plaintiff purchased a 
grain drill for $200.00 and a combine for $471.58. This 



20 

combine lasted until 1932, when he purchased another for 
$625.00 (Tr. 169). 

IN 1928 plaintiff exchanged farm work (Tr. 56) and 
because he came late to work, he was thought to be "scab- 
bing" (Tr. 56-57). By one witness he was considered to 
be a good horseman, a good workman if he wanted to 
work; but he just didn't seem to have any ambition. Dur- 
ing this year, he operated two ranches (Tr. 67, 70, 104). 
Plaintiff would do nearly all the plowing on his wheat 
farms and every fall since 1928 he has been driving a 
combine with very few interruptions except just now and 
then to rest (Tr. 104, 68). In 1929, in addition to his 
ranch work and work with the combine, he helped pull 
pipe from a well (Tr. 36, 39). In 1930 he operated his 
two ranches and in addition did drilling and plowing (Tr. 
168). In 1931 he continued operating the two wheat 
farms and his combine (Tr. 165). 

Since his discharge, over his own signature, on Sep- 
tember 21, 1931, he stated that he has made a fair living 
(Tr. 105). His wife complains that he is a hopeless 
drinker (Tr. 72) and that he cannot quit the habit. 

In 1932 he continued operating his combine (Tr. 51, 
166, 168) and his two ranches. He killed hogs, worked 
on a well and went for wood (Tr. 43), and nothing un- 
usual was observed about his work or his physical condi- 
tion (Tr. 49). During this year he used eight horses on 
his combine, cut 360 acres of grain and lost two and a 
half days out of ten (Tr. 44). During the ten days he 



2\ 

kept operating all day except stops for oil, and plaintiff 
was doing the driving and working all right (Tr. 45-47). 
There was some well work this year and while getting 
wood he worked continuously (Tr. 52). In 1933 he con- 
tinued operating the two ranches and operated his com- 
bine (Tr. 69). 

Since his return from the service, he has coughed at 
night (Tr. 69, 41). Some witnesses testified that he has 
vomited after meals (Tr. 41, 54, 69); and others have 
testified that they did not observe him vomiting (Tr. 48, 
165). Witnesses have testified that there was nothing 
wrong with the plaintiff while he was engaged in getting 
wood (Tr. 49), and there was nothing wrong with him 
in 1932 (Tr. 53), and there was nothing wrong with him 
while working in the gravel pit (Tr. 63). Witnesses 
have testified that he did not eat good, and others that he 
did eat good (Tr. 53, 89). Plaintiff stated that his dizzy 
spells occurred when he exerted himself, and at the same 
time stated that they came on when he was doing nothing 
but sitting around (Tr. 87). Plaintiff stated that his 
vomiting is not nearly as bad as it was the first two years 
after he came home ; that his eyes are getting worse ; that 
his lungs are about the same as when he left the service 
(Tr. 86). 

There is a dispute as to plaintiff's weight before and 
after his service, the difference being from 10-15 pounds 
(Tr. 70) to 25-30 pounds (Tr. 48). Plaintiff's Exhibit 
No. 3, which contains a physical examination at the time 



22 

he entered service, gives his weight as 142^ pounds on 
August 3, 1917. This shows no loss of weight. 

From 1919 to 1927, plaintiff received no medical treat- 
ment excepting home remedies consisting mostly of plas- 
ters (Tr. 55, 69, 81). At the time that plaintiff was dis- 
charged from the service, he made his voluntary state- 
ment that he then believed he was not suffering from the 
eft"ects of any wound, injury or disease and that he did 
not have any disability or impairment of health, whether 
or not incurred in the military service (Tr. 79, 99, 100). 
On July 2, 1931, in a claim for insurance, plaintiff stated 
that his cause of disability was, — left eye, stomach bad 
and feet ; and that the disability began November 1, 1918 
(Tr. 97). On September 2, 1931, plaintiff made a sworn 
statement that he believed himself entitled to monthly 
payments of insurance on account of total disability re- 
sulting from poison gas, shell shock and exposure; that 
the disability began about November 1, 1918; that the 
cause of disability was — sight of left eye, feet and stom- 
ach (Tr. 97). 

The medical testimony on behalf of the plaintiff was 
given by Drs. Kackley and Groom. The former testified 
that on a recent examination he found the plaintiff suffer- 
ing from sunken chest and rales in both lungs (Tr. 109). 
He also stated it was his opinion that the plaintiff is total- 
ly and permanently disabled and has been in such a con- 
dition from the time he received the poison gas (Tr. 136). 
This opinion was based upon a hypothetical question, the 



23 

definition of total and permanent disability, and the wit- 
ness' findings and examination (Tr. 111-136). The 
hypothetical question is not continuous, consists of sev- 
eral additions stated after interruptions and contains con- 
tradictory statements and matters in dispute (Tr. 133). 
In fact, the witness was told by the court that there is a 
conflict in the evidence and the witness was entitled to 
have the facts of that dispute (Tr. 134). Upon cross 
examination it was developed that the witness took into 
consideration his own observations and the report of the 
chemical warfare of the German Army (Tr. 138) and at 
least some of the history which the plaintiff gave the wit- 
ness at the time the examination was made for the pur- 
pose of testifying in this case (Tr. 138 et seq.). Witness 
also stated that he did not know when total and perma- 
nent disabihty began as a result of the gas (Tr. 145). 

Dr. Groom testified that he came as a result of a sub- 
poena (Tr. 196) and that it was his opinion from the 
hypothetical question which he had heard stated to Dr. 
Kackley that the plaintiff is totally and permanently dis- 
able and has been in such a condition since prior to May 
8, 1919 (Tr. 156). This witness also testified that, as- 
suming the plaintiff from 1921 to 1926 had operated a 
farm with one other and if the plaintiff could do that farm 
work during that period, he would still consider him per- 
manently and totally disabled. The witness further testi- 
fied that if a man farms by himself with the exception of 
harrowing and if during the harvest he did his work with 



24 

two or three other men, he would still consider him totally 
and permanently disabled and unable to follow a gainful 
occupation (Tr. 160). This witness further testified 
that he was mistaken in respect to being at the trial by 
reason of the subpoena and that he thought any notice 
from an attorney was equal to a subpoena (Tr. 196 et 
seq.) 

The defendant submitted the medical testimony of Dr. 
Sprague, Dr. Ricks and Dr. Germon. The first made an 
examination in 1922; the second and third made exami- 
nations in 1931. All three testified that the plaintiff was 
not permanently and totally disabled at the time of their 
respective examinations, giving their reasons therefor 
(Tr. 173, 178, 195). 

POINTS AND AUTHORITIES 
I. 

Under the War Risk Insurance Act, plaintiff has the 
burden of proving ( 1 ) existence of total disability during 
the effective dates of the policy, and (2) that such total 
disability was then, ever since has been, and probably 
will continue to be permanent. 

U. S. V. Kerr (CCA 9), 61 Fed. (2d) 800. 

U. S. V. Rentfrow (CCA 10), 60 Fed. (2d) 488. 

U. S. V. Diehl (CCA 4), 62 Fed. (2d) 343. 

II. 

The cause of disability or ailment must be one of which 
it is possible to say with reasonable certainty that it was 



25 

incurable at the time of the lapse of the policy, or with 
equal certainty that it must lead to another and incurable 
ailment. 

U. S. V. Clapp (CCA 2), 63 Fed. (2d) 793, 795. 

U. S. V. Wilfore (CCA 2), 66 Fed. (2d) 255. 

III. 

The question of fact, whether the known sysmtoms 
at the time the policy lapsed disclosed permanent disa- 
bility, must be answered by expert medical testimony 
and not left to the unguided intuitions of the jury. 

U. S. V. Clapp, supra. 

IV. 

-» 

A case should never be submitted on probabilities. A 

mere scintilla of evidence is not sufficient to warrant the 

submission of issues of fact to a jury. 

U. S. V. Lawson (CCA 9), 50 Fed. (2d) 646. 

Nichols V. U. S. (CCA 9), 68 Fed. (2d) 597. 

V. 

A verdict should be directed if the state of the evidence 
is such that a verdict, if returned for one party, would 
have to be set aside upon motion of the other party. 

Merchants Bank v. State Bank, 10 Wall (US) 604, 
637. 

Improvement Company v. Munson, 14 idem 442. 

Bowditch V. Boston, 101 U. S. 16, 18. 



26 

VI. 

Upon motion for a new trial the court must weigh 
the evidence. 

46 C. J. 401, 402, note 75. 
Meldram v. Curtis & Bro., 29 Fed. (2d) 582. 
Lake Erie & W. R. Co. v. Schneider, (CCA 6), 257 
Fed. 675. 

VII. 

It is axiomatic that opinions of witnesses are in general 
irrelevant. 

Jones on Evidence (3d Ed.), page 541, 553. 

VIII. 

All hypothetical questions should be so framed as not 
to call upon the witness to determine controverted ques- 
tions of fact, or to pass upon the preponderance of the 
evidence. 

Inland etc. Coasting Co. v. Tolson, 139 U. S. 551, 11 

Sup. Ct. 653, 35 L. Ed. 270. 
Pratt v. North German Lloyd S. S. Co. (CCA 2) 184 

Fed. 303, 33 L. R. A. (NS) 532. 
Giraudi v. Electric Imp. Co. (Cal), 40 Pac. 108, 28 

L. R. A. 596. 
Jones on Evidence, (3d Ed.), page 561, note 67. 

ARGUMENT 

In view of the fact that the motion for a new trial was 
based upon the insufficiency of the evidence and the de- 



27 

nials of motions for directed verdict, these three points 
will be argued together. 

The work record in this case shows that after the plain- 
tiff returned to his home in 1919, he rested for a period 
of four or five weeks and then entered into the general 
farm work on the ranch which he and his brother had 
been operating on a 50-50 basis prior to the war service. 
The plaintiff drilled grain for about two weeks, harvested 
for five days, plowed with eight horses, resting about 
four times a day, fixed fences, did ditching and summer 
fallowed. During the plowing he would rest about four 
times a day. 

In 1920 he drove a combine for about two days, using 
twelve horses and working nine hours per day. He cared 
for his horses during this period. During the entire year 
he continued to do general farming work on the ranch 
which he operated with his brother, a hired man being 
employed in the spring of the year. In the fall of the 
year the two men would get out wood and do the winter 
chores. 

During the entire year of 1921, the same farm was 
operated in the same manner. This farming arrange- 
ment continued in like manner during the years 1922, 
1923, 1924, 1925 and 1926, when the partnership ended 
and Park Lusk sold out. During this entire period, har- 
rowing was about the only work which the plaintiff did 
not do. It is made to appear that the dust interfered 
with this work and for that reason it was done by others. 



28 

In 1925 the plaintifif worked for one month cleaning 
ditch, in which operation he used a one-team fresno. 

In 1927 the plaintiff spent two months cutting feed 
and hay and working on a combine. The latter operation 
required the handling of eight horses for from six to 
eight hours per day. For this work the plaintiff received 
$2.00 per day and 50c per day for each horse. 

in 1928, after plaintiff" married his present wife, he 
operated two ranches. Each ranch consisted of 160 acres 
with approximately 140 acres of dry wheat land on each. 
Each farm was operated during alternate years and while 
the land on one was being rested, it was harrowed to 
keep down the weeds. This arrangement continued from 
1928 to the time of the trial in 1933 and during each of 
these years the plaintiff did general farm work on each 
ranch with the exce])tion of harrowing. In addition to 
tliis ordinary work and during the year 1928, the plaintiff 
drove a combine for from two to three weeks. 

In 1929 plaintiff worked on the road for a period of 
thirty days, missing four or live days. This work con- 
sisted in general of operating a fresno. Plaintiff worked 
from eight to nine hours per day at 35c or 40c per hour 
and also rented to the county from four to eight head of 
horses. This road work continued over a period of about 
nine years, varying in length of time from a few days' 
minimum to a thirty days' maximum work period. Plain- 
tiff's brother was the road overseer during this time and 
gave the plaintiff employment. In 1932 the plaintiff 



29 

drove a combine for ten days, cutting 360 acres of grain 
and losing about one-fourth of the time. Eight horses 
were used on this combine. In 1933 the plaintiff operat- 
ed a combine, using eight to twelve head of horses. 

During this period from 1919 to 1933, the record 
shows, that the plaintiff did the work assigned to him 
in the gravel pit in 1929 (Tr. 38) ; he worked all day 
on a well operation in 1929 (Tr. 39) ; while working in 
the gravel pit, he was driving and dumping the fresno, 
working all the time the witness observed him (Tr. 40) ; 
he would rest fifteen or twenty minutes at a time while 
drilling the well, sawing wood and killing pigs (Tr. 43) ; 
during the ten days when he was operating a combine in 
1932, he kept working practically all day, stopping for 
oil now and then (Tr. 45) ; and when 180 acres of grain 
was cut in ten days, the plaintiff would stop to rest for five 
minutes, but he was driving the horses all right and was 
able to holler "whoa" to his horses, being eight in number 
(Tr. 46-47). While he was hauling wood, nothing pecu- 
liar was observed about his acts or physical condition 
(Tr. 49). Again, on the combine Mr. Lusk went out 
each and every morning, stayed on the job throughout 
the day, and only stopped when he had several break- 
downs on the machine (Tr. 51). This witness noticed 
nothing peculiar about his work in the wood, and plain- 
tiff got his load out with the others. (Tr. 52-53). The 
plaintiff is a good horseman, understands the work and 



30 

could do good, doesn't seem to have any ambition and has 
been seen drunk a number of times (Tr, 57). 

David Lusk, plaintiff's brother, stated that Park Lusk 
helped him every year until he moved away from that 
ranch (1919-1926), excepting harrowing (Tr. 60); 
Park Lusk worked ten days straight on a combine (Tr. 
61-62) ; while the plaintiff was operating a scraper con- 
tinuously through the day's work, this witness noticed 
nothing out of the ordinary in respect of the plaintiff 
(Tr. 63) ; this witness and plaintiff operated the ranch 
from 1919 to 1926 without hiring additional help except 
in the spring when the ditches were being cleaned (Tr. 
65-66). 

Mrs. Park Lusk testified that at one time when she 
was working on the combine with her husband, the latter 
was driving the horses and worked continuously through- 
out the day (Tr. 69). The plaintiff testified that, as to 
the plowing on the partnership ranch, it was divided up as 
near as could be between himself and his brother (Tr. 
85 ) ; that during the road work he worked steady one 
day after another while he was on the job, over various 
periods of time, but this work was driving the scraper 
while others at each end of the haul did the loading and 
dumping (Tr. 88) ; that when he harvested the 320 acres 
he would drive all day long some days and would stop 
twenty minutes or so to rest on other days (Tr. 101) ; 
that during the fall of 1919 he and his brother harvested 
the wheat crop together, a hired man sewing sacks while 



31 

plaintiff was driving the machine (Tr. 102) ; that he put 
in a Httle time every year working on the roads and at 
one time carried the job through to completion (Tr. 103) ; 
that from 1928 he has farmed two ranches of about 160 
acres each, doing nearly all the plowing there was to do 
and driving a combine every fall since 1928 with very 
few interruptions except just now and then to rest (Tr. 
104). 

We believe that this testimony on the part of witnesses 
and the admissions and direct statements made by the 
plaintiff, taken together with his written admission dated 
September 21, 1931 (Tr. 105) that "I make a fair liv- 
ing," and taken with the admission made in writing at 
Camp D. A. Russell in 1919 that he was all right and 
figured he was a well man and wanted to go home (Tr. 
98-99), show conclusively and by a preponderance of the 
evidence that the plaintiff not only was able to follow 
continuously a gainful occupation, but that he did in fact 
follow such an occupation during all of the years from 
1919, when he was in partnership with his brother, to 
1933, when he was still operating 320 acres of land and 
had in cultivation each year approximately 140 acres 
of wheat, and in this connection it is our contention that 
such a work record and such admissions on the part of 
the plaintiff conclusively negative any and all expert opin- 
ions given by doctors for the plaintiff to the effect that 
the plaintiff was totally and permanently disabled prior 
to the time this long work record was made, basing our 



Z2 

conclusion on the well established principle that an expert 
opinion rises no higher than the facts on which it is based. 

There was an item made to show that the plaintiff 
did not eat his meals and that on many occasions and over 
a period of time he would lose his meals by reason of 
overexertion. I n this connection J. E. Butler, plaintiff's 
witness, stated that he had eaten with the plaintiff in the 
homes of both and that he did not observe anything un- 
usual after plaintiff took his meals (Tr. 48). Mrs. Dave 
Lusk, plaintiff's sister-in-law, stated that the plaintiff 
took his three meals at the same table with her and that 
he ate each and every meal at the table with her and the 
rest of the family most of the time (Tr. 53). However, 
in line with plaintiff's grounds for recovery, this witness 
did testify that after breakfast plaintiff would go outside 
and vomit. Plaintiff testified, "My vomiting isn't near 
as bad as it was the first two years I came home" (Tr. 
86) ; and that he was at the tatble three times a day, 
sometimes eating a full meal and sometimes only drinking 
a cup of coffee and quitting. The record on this question 
seems to reveal that the plaintiff did eat his meals and 
was not bothered with his stomach to any great extent 
whatsoever since the lapse of his insurance policy; and 
as strongly reveals in our opinion that the plaintiff cor- 
rected his admissions against interest at such times as the 
interest which he has in the outcome of this litigation 
came forcibly to his attention. In other words, we con- 
tend that the admissions against interest are much 



33 

stronger than the direct testimony in favor of his in- 
terest when the nature and extent and value of plaintiff's 
interest in this litigation is taken into consideration. 

For the purpose of continuity, we will turn to the dis- 
cussion of the hypothetical question propounded to Dr. 
Kackley and Dr. Groom. This hypothetical question is 
not a substantial statement of the facts in this case for 
the reason that it contains the following statement: "... 
during which time he threw up every breakfast for seven 
months continuously, as well as vomiting on the occasion 
of his taking other meals" (Tr. 224). This is not the 
testimony and is such an overstatement of the facts as to 
be prejudicial to the defendant and create prejudice in the 
minds of the jury. In another respect it is not substan- 
tially correct in that it does not contain the admission 
of the plaintiff made at the time of trial that 'T figured 
I was a well man and wanted to go home" (Tr. 99), which 
statement was made in an attempt to explain why the 
plaintiff in writing, in the Declaration of Soldier, made 
at the time of discharge, stated that he was suffering 
from no wounds or disabilities. It was a statement in 
corroboration of the written statement and should have 
been given in order that the jury could take into consid- 
eration all of the facts in arriving at a verdict, if it was 
proper to give the jury a hypothetical question containing 
conflicting statements. There again appears in the hy- 
pothetical question "that during the first seven months 
after he was home, he never retained a breakfast, going 



34 

out within from tifteen to twenty or thirty minutes after 
he ate and vomiting it up; that he had vomiting spells 
with any extra exertion and in connection with his meals 
other than his breakfast throughout this period." This 
is a second emphasis of the same overstatement of tes- 
timony. 

"Not going out in the morning because of his weak- 
ness due to the vomiting" (Tr. 228) and "he didn't go 
out mornings because of his weakened condition follow- 
ing vomiting and those things" (Tr. 228), are contin- 
uations of the same overstatement. Then this is followed 
by the statement, "As I have illustrated this first year 
after he came home, practically the same was true of 
operations regarding work each year, laying off and the 
pains and suffering were there every year thereafter and 
up until the very present moment except in one particu- 
lar, — the vomiting has decreased in the number of times 
annually but it is still with him and he has the same con- 
dition I have heretofore given," which is a further em- 
phasis of an overstatement to the prejudice of the defend- 
ant and is not a substantial statement of the case made 
by the plaintiff. 

The hypothetical question contains such expressions 
as the following, — "would remain in the home trying to 
rest" (Tr. 228), "that in the combine work, as I say, he 
drove the team and he would plow some, especially as I 
have just related relative to plowing and drilling" (Tr. 
228), "that he is continually taking medicine since he has 



35 

come home, part of it being castor oil and the whiskey 
and alcohol which was prescribed to him in France" (Tr. 
229), "that he has made a living — a fair living — through 
the aid and help of others" (Tr. 230), "the plowing being 
done that year on the occasion when he was unable to 
continue" (Tr. 230), "sometimes his wife worked on 
the combine handling the sacks when he was driving and 
this was because he was unable to do that heavier work 
while his wife could" (Tr. 230), "would have to stop to 
catch his breath, then possibly go home" (Tr. 230). 
These expressions constitute overstatement of facts as 
disclosed by the evidence, conclusions on the part of the 
framer of the question and emphasizing of the ultimate 
fact to be determined by the jury in the presence of the 
jury. In other words, the hypothetical question contains 
within itself statement of conclusions and ultimate facts 
which the witness himself is asked to determine and for 
that reason the question is not a substantial statement of 
the evidence as it exists. 

The hypothetical question was also objected to on the 
ground that any opinion would invade the province of the 
jury. We think that this opjection is good, for the reason 
that the question contains conflicting statements, and in 
order to arrive at an opinion the witness must weigh 
these statements and determine which is the truth in 
addition to determining on which side the preponderance 
lies. If the question is not a fair substantial statement 
of bare facts, then the opinion of the witness is based not 



36 

only upon conflicting evidence but upon conclusions and 
opinions and the interpretation of the evidence as con- 
ceived by the propounder of the question, which results 
in the basing of an opinion upon opinions. This is clearly 
contrary to law. 

A medical expert's opinion must be based upon symp- 
toms which were known at the time the policy lapsed and 
those symptoms must disclose permanent disability. The 
hypothetical question does not contain a statement of 
symptoms known at the time the policy lapsed in respect 
of any of the disabilities alleged in the complaint and the 
evidence does not disclose any such symptoms. Conse- 
quently, any opinion which the medical experts express 
has no weight whatsoever and cannot support a verdict 
in favor the plaintiff. 

This brings us to the principle of law that the cause 
of disability or ailment must be one of which it is possi- 
ble to say with reasonable certainty that it was incur- 
able at the time of the lapse of the policy or with equal 
certainty that it must lead to another and intcurable ail- 
ment. We submit that here is no evidence that any of 
the causes of disability, or any combination thereof, were 
established with reasonable certainty that the same were 
incurable at the time of the lapse of the policy and that 
for this reason the evidence is wholly insufficient to sus- 
tain the verdict and that the court should have granted 
defendant's motions for a directed verdict. 



37 

The same identical hypothetical question having been 
propounded to Dr. Groom, the preceding discussion ap- 
plies to both instances. 

One Bishoff, plaintiff's witness, on direct examination 
was asked the question, "Would he do all his work," to 
which the witness replied, "No, he did not." An objec- 
tion was made to the question and answer on the ground 
that it calls for a conclusion on the part of the witness 
(Tr. Z7). It is our opinion that a witness may state facts 
to the jury but that it is for the jury to determine whether 
or not, based on the facts given, the plaintiff did all of 
his work. If the plaintiff did all of his work, then, of 
course, he was not totally and permanently disabled. If 
the plaintiff did not do all of his work, then he might or 
might not be totally and permanently disabled. In either 
event it is for the jury to determine whether or not the 
plaintiff did or did not do all of his work ; in other words, 
whether or not the plaintiff was, at the time the work in 
question was done, totally and permanently disabled. We 
submit that a witness cannot testify that a claimant un- 
der the terms of a War Risk policy did or did not do all 
of his work. That is the ultimate fact for the jury. If 
a witness is an employer and has assigned work to the 
plaintiff to do and the work was not done, that is a dif- 
ferent proposition. In the instant case we have a third 
party, who evidently did not know what work the plaintiff 
was required to do, attempting to express a conclusion 
without any basis whatsoever therefor. 



38 

It is the Government's contention that the errors as- 
signed and discussed should be well taken on this appeal 
and that the physical facts disclosed that the plaintiff was 
not totally and permanently disabled at the time when his 
policy of insurance lapsed and has not been totally and 
permanently disabled since that time within the meaning 
of permanent and total disability as defined by the SEC- 
RETARY and interpreted by the courts, and that the 
judgment heretofore entered in this case should be re- 
versed. 

Respectfully submitted, 

J. A. CARVER, 

United States Attorney for the 
District of Idaho. 

E. H. CASTERLIN, 

FRANK GRIFFIN, 

Assistant United States Attor- 
neys for the District of Idaho. 

R. L. SLAUGHTER, 

Attorney, Department of Justice. 

Service of the above and foregoing Brief of Appellant, 
and receipt of a copy thereof, is hereby acknowledged 
this day of April, A. D. 1934. 



Attorneys for Appellee. 



No. 7457 

IN THE 

(Hxxtmt Qlnurt ttf Kppmh 

JFor tl^t Nttttlj (tlrtnlt 

UNITED STATES OF AMERICA, ^ 

Appellant, 
VS. 

PARK LUSK, Appellee. 



BRIEF OF APPELLEE 



Upon Appeal from the District Court of the United States 
for the District of Idaho, Eastern Division 

Hon. Charles C. Cavanah, District Judge. 



J. A. CARVER, 

United States District Attorney for the 
District of Idaho; 
E. H. CASTERLIN, 
FRANK GRIFFIN, 
Assistant United States Attorneys for the 
District of Idaho; 

A. L. FREEHAFER, 

Attorney, U.S. Department of Justice, 
Residence: Boise, Idaho, 
Attorneys for the Appellant. 

B. W. OPPENHEIM, 
J. M. LAMBERT, 

J. B. MUSSER, 

Residence: Boise, Idaho, 
Attorneys for Appellee. 



Filed , 1935 

, Clerk 



IN THE 



Qltrmtt (Hmrt af Kppmh 

3For tl|f SJttttlj fitrrutt 



UNITED STATES OF AMERICA, 

Appellant, 

vs. 

PARK LUSK, Appellee. 



BRIEF OF APPELLEE 



Upon Appeal from the District Court of the United States 
for the District of Idaho, Eastern Division 

Hon. Charles C. Cavanah, District Judge. 



J. A. CARVER, 

United States District Attorney for the 
District of Idaho; 
E. H. CASTERLIN, 
FRANK GRIFFIN, 
Assistant United States Attorneys for the 
District of Idaho; 

A. L. FREEHAFER, 

Attorney, U.S. Department of Justice, 
Residence: Boise, Idaho, 
Attorneys for the Appellant. 

B. W. OPPENHEIM, 
J. M. LAMPERT, 

J. B. MUSSER, 

Residence: Boise, Idaho, 
Attorneys for Appellee. 



Filed .-, 1935 

, Clerk 



INDEX 

Page 

Statement of the Case 11 

Statement of Facts 12 

The Injury and Disease: 

a. Immediate effects 13 

b. Permanency 15 

Medical Attention: 

a. During military service 16 

b. Findings and diagnosis by defendant's physicians 16 

c. By civilian doctors 19 

d. Home remedies and treatments 20 

Disabilities, Pain and Suffering: 

a. As related by appellee 21 

b. As observed by laymen 24 

c. As found by physicians 28 

' d. Opinion evidence by physicians 36 

Work and Employment Record: 

a. During military service 38 

b. Efforts to work and effect it had on his physical condition .... 39 

c. Assistance by others 44 

The Issue 46, 47 

Review of Cases Cited in Appellant's Brief 47 

Points and Authorities: 

Proposition of Law No. 1 65 

Proposition of Law No. 2 67 

Proposition of Law No. 3 67 

Proposition of Law No. 4 68 

Proposition of Law No. 5 69 

Proposition of Law No. 6 70 

Proposition of Law No. 7 71 

Proposition of Law No. 8 72 

Proposition of Law No. 9 72 

Proposition of Law No. 10 73 

Argument 83 



DISCUSSION OF CASES CITED IN 
APPELLANT'S BRIEF 



Page 

Bowditch vs. Boston, 101 U.S. 16, 18 58 

46 C.J. 401, note 75 59 

Giraudi vs. Elec. Imp. Co. (Cal.), 40 Pac. 108, 28 L.R.A. 596 63 

Improvement Co. vs. Munson, 14 Wall. 442 57 

Inland Etc. Coasting Co. vs. Tolson, 139 U.S. 551, 11 S. Ct. 653; 35 

L. Ed. 270 62 

Jones on Evidence (3d Ed.), pages 541, 563 60 

Lake Erie & W. R. Co. vs. Schneider (CCA. 6), 257 Fed. 675 60 

Meldram vs. Curtis & Bro., 29 Fed. (2d) 582 59 

Merchants Bank vs. State Bank, 10 Wall. (U.S.) 604, 637 57 

Nichols vs. U.S. (CCA. 9), 68 Fed. (2d) 597 56 

Pratt vs. North German Lloyd S. Co. (CCA. 2), 184 Fed. 303; 33 

L.R.A. (N.S.) 532 63 

U.S. vs. Clapp (CCA. 2), 63 Fed. (2d) 793, 795 50, 53 

U.S. vs. Diehl (CCA. 4), 62 Fed. (2d) 343 49 

U.S. vs. Kerr (CCA. 9), 61 Fed. (2d) 800 47 

U.S. vs. Lawson (CCA. 9), 50 Fed. (2d) 646 55 

U.S. vs. Rentfro (CCA. 10), 60 Fed. (2d) 488 48 

U.S. vs. Wilfore (CCA. 2), 66 Fed. (2d) 255 52 



TABLE OF CASES IN SUPPORT OF POSITION 
TAKEN BY APPELLEE 

Page 

Adams vs. Thief River Falls, 84 Minn. 30, 86 N.W. 767 80 

Alabama Fuel & Iron Co. vs. Minyard, 88 So. 145; 205 Ala. 140 70 

Alaska Fish Salting & By-Products Co. vs. McMillan, 266 Fed. 26. . . 69 

Alexander vs. U.S., 138 U.S. 353, 356; 11 S. Ct. 350; 34 L. Ed. 954. . 76 

Allison vs. Electric Coal Co., 151 111. App. 55 79 

78 A.L.R., note page 755 78 

American Agricultural Chemical Company vs. Hogan, 213 Fed. 416 

(CCA. 1) 76 

American Brake Shoe Etc. Co. vs. Jankus, 121 111. App. 267 79 

Anderson vs. Seropian, 147 Cal. 201, 81 P. 521 78 

Arkansas Bridge Co. vs. Kelly-Atkinson Cons. Co. (CCA. 8), 282 

Fed. 802, 804 65 

Arkansas River Packet Co. vs. Hobbs, 105 Tenn. 29, 58 S.W. 278 82 

Ascher vs. U.S., 63 Fed. (2d) 20 (CCA. 8) 74, 78 

Aspy vs. Botkins, 160 Ind. 170, 66 N.E. 462 79 

Atchison T. Etc. Co. vs. Myers, 63 Fed. 792 at 796 (CCA. 7) 75 

Baldwin vs. Gaines, 92 Vt. 61; 102 Atl. 338 78 

Barfoot vs. White Star Line, 170 Mich. 349, 136 N.W. 437 80 

Barker vs. Perry, 67 Iowa 146, 25 N.W. 100 80 

Barksdale vs. U.S. (CCA. 10), 46 Fed. (2d) 762 at 763-4 68 

Bartee vs. U.S., 60 Fed. (2d) 247 (CCA. 6) 75 

Beaubien vs. Cicotte, 12 Mich. 459 77 

Bergert vs. Payne (CCA. Ohio 1921), 274 Fed. 784 68 

Bergholtz vs. Oregon City, 240 Pac. 225, 116 Ore. 18 70 

Brown vs. Douglas Lumber Co., 113 Minn. 67, 129 N.W. 161 80 

Brown vs. Swineford, 44 Wis. 282, 28 Am. Rep. 582 82 

Brownlee et ux. vs. Mutual Benefit, Health & Accident Association 

(CCA. 9), 29 Fed. (2d) 71 67 

Burke vs. U.S. (CCA. 9), 50 Fed. (2d) 653 67 

Burton vs. Driggs, 20 Wall. 125, 22 L. Ed. 299 70 

Butez vs. Fonda Etc. R. Co., 20 Misc. 12, 45 N.Y.S. 808 81 

C 875, par. 1, 45 Stat. 964; par. 445, Title 38, U.S.C.A 73 

C 849, par. 4, 46 Stat. 992; par. 445, Title 38, U.S.C.A 73 

Camden vs. Doremus, 3 How. 515; 11 L. Ed. 705 71 

Carico vs. West Virginia Cent. Etc. R. Co., 39 W. Va. 86, 24 L.R.A. 

50, 19 S.E. 571 82 

Carpenter vs. Walker, 170 Ala. 659; 54 So. 60; Ann. Cas. 1912 D 863. 77 

Carter vs. U.S. (CCA. 4), 49 Fed. (2d) 221 68, 75 

Chicago Etc. R. Co. vs. Clausen, 173 111. 100, 50 N.E. 680 79 

Chicago Etc. R. Co. vs. De Bord, 62 Tex. Civ. App. 302, 132 S.W. 

845 82 

Chicago Etc. R. Co. vs. Krayenbuhl, 70 Neb. 766, 98 N.W. 44 81 

Chicago, Great Western Ry. Co. vs. Price, 38 CCA. 239; 97 Fed. 423 74 

5 



Page 
Chicago Union Traction Company vs. Roberts, 229 111. 481, 82 N.E. 

401 77 

Citizens' St. R. Co. vs. Willoeby, 134 Ind. 563, 33 N.E. 627 79 

22 C.J., page 710, sec. 800 71 

64 C. J., Sees. 204, 213, 214 65, 66 

Clay vs. Chicago Etc. R. Co., 104 Minn. 1, 115 N.W. 949 80 

Cleveland Etc. R. Co. vs. Colson, 51 Ind. App. 225, 99 N.E. 433 80 

Clune vs. U.S., 159 U.S. 590, 592; 16 S. Ct. 125, 40 L. Ed. 269 76 

Cole vs. Fall Brook Coal Co., 87 Hun. 584, 34 N.Y.S. 572 83 

Connecticut Mutual Life Insurance Co. vs. Lathrop, 111 U.S. 612, 4 

S. Ct. 533, 28 L. Ed. 536 76 

Continental Casualty Co. vs. Wynne, 36 Okl. 325, 129 P. 16 82 

Continental Ins. Co. vs. Fortner, 25 Fed. (2d) 398 (CCA. 6) 71 

Cook vs. Danaher Lumber Co., 61 Wash. 118, 112 P. 245 82 

Crete vs. Hendricks, 2 Neb. Unof. 847, 90 N.W. 215 81 

Cropper vs. Titanium Pigment Co., 47 Fed. (2d) 1038, 78 A.L.R. 737. . 76 

Cunningham vs. Union Pac. R. Co., 4 Utah 206, 7 P. 795 82 

D. & R.G. Ry. Co. vs. Roller, 100 Fed. 738 (CCA. 9) 77 

DeJohn vs. Alaska Matanuska Coal Co. (CCA. 9), 41 Fed. (2d) 612. .65 

Dinet vs. Rapid City, 222 Fed. 497 (CCA. 8), 26 R.C.L. 1046 70 

Disotell vs. Henry Luther Co., 90 Wis. 635, 64 N.W. 425 82 

Donnelly vs. St. Paul Ry. Co., 70 Minn. 278, 73 N.W. 157 78 

Dunkin vs. Hoquiam, 56 Wash. 47, 105 P. 149 82 

Edwards vs. Three Rivers, 96 Mich. 625, 55 N.W. 1003 80 

Ekblom vs. Reed, Inc., 71 Fed. (2d) 399 (CCA. 5) 77 

Ewald vs. Michigan Cent. R. Co., 107 111. App. 294 79 

Faivre vs. Mandercheid, 117 Iowa 724, 90 N.W. 76 83 

Felsch vs. Babb, 72 Neb. 736, 101 N.W. 1011 81 

Finn vs. Cassidy, 165 N.Y. 584; 59 N.E. 311, 53 L.R.A. 877 78 

Fladeland vs. U.S. (CCA. 9), 53 Fed. (2d) 17 68, 72 

Ford vs. Providence Coal Co., 124 Ky. 517, 99 S.W. 609 80 

Ford vs. U.S. (CCA. 1), 44 Fed. (2d) 754 68, 75 

Frates vs. Eastman (CCA. 10), 57 Fed. (2d) 522 65 

Freeman vs. Hutchinson, 15 Ind. App. 639, 43 N.E. 16 80 

French vs. Wilkinson, 93 Mich. 322, 53 N.W. 530 80 

Frey & Sons vs. Cudahy Packing Co., 256 U.S. 208, 211; 41 S. Ct. 

451; 65 L. Ed. 892 65 

Friedler vs. Hekeler, 96 Conn. 29, 112 A. 651 78 

■Gila Valley Etc. Ry. Co. vs. Lyon, 203 U.S. 465, 27 S. Ct. 145, 51 L. 

Ed. 276 73, 76 

Graves vs. Battle Creek, 95 Mich. 266, 35 A.S.R. 561, 19 L.R.A. 641, 

54 N.W. 697 80 

Great Northern Ry. Co. vs. Shellenbarger, 54 Fed. (2d) 606 (CCA. 9) 69 

Green vs. U.S., 57 Fed. (2d) 9 (CCA. 8) 75 

Gunning vs. Cooley, 281 U.S. 90; 50 S.Ct. 231, 74 L. Ed. 720 67, 69 

Hamilton vs. U.S., 73 Fed. (2d) 357 73 

Hammond vs. Woodman, 66 Am. Dec. 219, 235 75 

Hart vs. U.S. (CCA. 9), 11 Fed. (2d) 499 64 

Hartford Fire Ins. Co. vs. Empire, 30 Fed. (2d) 794 (CCA. 8) 77 

Hatfield vs. St. Paul Etc. R. Co., 33 Minn. 130, 53 Am. Rep. 14, 22 

N.W. 176, 18 Am. & Eng. R. Cas. 292 80 

6 



Page 

Hayden vs. U.S. (CCA. 9), 41 Fed. (2d) 614 73 

Hearings before the Sub-Committee on Insurance, Seventieth Con- 
gress, First Session on H.R. 8333, page 105 75 

Hess vs. Lowrey, 122 Ind. 225, 17 A.S.R. 355, 23 N.E. 156, 7 L.R.A. 

90 79 

Hiller vs. Sharon Springs, 28 Hun. 344 81 

Holmes vs. Goldsmith, 147 U.S. 150, 164; 13 S. Ct. 288, 37 L. Ed. 118. . 76 

Houston vs. Chicago, Etc. R. Co., 118 Mo. App. 464, 94 S.W. 560 81 

Houston Etc. R. Co. vs. Anglin (Tex. Civ. App.), 86 S.W. 785 82 

Hutchinson Cooperage Co. vs. Snider, 107 Fed. 633 (CCA. 7) 77 

Illinois Power & Light Co. vs. Hurley, 49 Fed. (2d) 681 (CCA. 8). . . 77 

Indiana Car Co. vs. Parker, 100 Ind. 181 79 

Jackson vs. Wells, 13 Tex. Civ. App. 275, 35 S.W. 528. Copipare: 

Sornberger vs. Candian P. R. Co., 24 Ont. App. 263 83 

Jameson vs. Weld, 93 Me. 345, 45 A. 299 80 

Jefferson Ice Co. vs. Zwicokoski, 78 111. App. 646 79 

Jones vs. Caldwell, 20 Idaho 5, 116 Pac. 110 77 

Jones, Commentaries on Evidence, Second Edition, Volume 3, page 

2452, sec. 1341 71 

Sec. 1392 78 

Jordan vs. Bowen, 46 Super. Ct. 355 81 

Knight vs. Overman Wheel Co. (Mass.), 54 N.E. 890 71 

Lacs vs. James Everard's Breweries, 61 App. Div. 431, 70 N.Y.S. 672, 

reversed on other grounds in 170 N.Y. 444, 63 N.E. 448 81 

La Marche vs. U.S. (CCA. 9), 28 Fed. (2d) 828 68, 72 

Lanark vs. Dougherty, 153 111. 163, 38 N.E. 892 79 

Laughlin vs. Harvey, 24 Ont. App. 438 83 

Law vs. U.S., 290 Fed. 972 75 

Lederer vs. Real Estate, Etc., 273 Fed. 933 (CCA. 3) 70 

Littlejohn vs. Shaw, 159 N.Y. 188; 53 N.E. 810 78 

Looram vs. Second Ave. R. Co., 11 N.Y. St. Rep. 652 83 

Louisville Etc. R. Co. vs. Wood, 113 Ind. 544, 14 N.E. 572, 16 N.E. 197 79 
Lumbra vs. U.S., 290 U.S. 551; 54 S. Ct. 272, 78 L. Ed. 347. .67, 70, 73, 75 

Lynch vs. U.S., 292 U.S. 571, 54 S. Ct. 840; 78 L. Ed. 1434 76 

Maher vs. Chicago, M. & St. P. Ry. Co., (CCA. 1921) 28 Fed. 431. 68 

Mclwain vs. Gaebe, 128 111. App. 209 79 

McNaier vs. Manhattan R. Co., 51 Hun. 644, 4 N.Y.S. 310 81 

Melavski vs. U.S. (CCA. 7), 43 Fed. (2d) 974 68 

Miller vs. U.S. (CCA. 9), 4 Fed. (2d) 384 64 

Missouri Etc. R. Co. vs. Moody, 35 Tex. Civ. App. 46, 79 S.W. 856. . 82 

Moore vs. U.S., 150 U.S. 57, 60; 14 S. Ct. 26, 37 L. Ed. 996 76 

Mulhado vs. Brooklyn City R. Co., 30 N.Y. 370 81 

Murray vs. U.S., 288 Fed. 1008 (C of A., D.C) 77 

Nebonne vs. Concord R.R., 68 N.H. 296, 44 A. 521 81 

Newport News & M.V. Co. vs. Carroll, 17 Ky. L.R. 374, 31 S.W. 132. 80 
New York Life Ins. Co. vs. Doerksen, 64 Fed. (2d) 240 (CCA. 10). . 77 

Nichol vs. U.S. (CCA. 9), 68 Fed. (2d) 597 67, 70 

Nicolay vs. U.S. (CCA. 10), 51 Fed. (2d) 170 68, 75 

Noonan vs. Caledonia Min. Co., 121 U.S. 393, 400; 30 L. Ed. 

1061 64, 70 

Northern Pac. Railroad vs. Urlin, 158 U.S. 271, 15 S. Ct. 840, 39 L. 
Ed. 977 76 

7 



Page 

Omaha St. R. Co. vs. Emminger, 57 Neb. 240, 77 N.W. 675 81 

Orscheln vs. Scott, 90 Mo. App. 352 81 

Osborne vs. Detroit, 32 Fed. 36, reversed on other grounds; Detroit 
vs. Osborne, 135 U.S. 492, 34 L. Ed. 260, 10 S. Ct. 1012 (see also 
Rose's U.S. Notes). See also Springer vs. Chicago, 135 111. 552, 12 

L.R.A. 609, 26 N.E. 514 82 

Ottawa vs. Gilliland, 63 Kan. 165, 88 A.S.R. 232, 65 P. 252 83 

Parks vs. City of Des Moines, 191 N.W. 728, 195 Iowa 972 70 

Patrick vs. Smith, 75 Wash. 407, 134 Pac. 1076; 48 L.R.A. (N.S.) 740 78 

Patterson vs. Howe, 102 Or. 275, 202 P. 225 82 

Patton vs. Texas & P. R. Co., 179 U.S. 659; 45 L. Ed. 361 68 

Penix vs. Sloan, 3 Fed. (2d) 258 (CCA. 5) 70 

Perry vs. Metropolitan St. R. Co., 68 App. Div. 351, 74 N.Y.S. 1 . . . 81 

Pidcock vs. West, 24 Ga. App. 785, 102 S.E. 360 78 

Pittsburgh Etc. R. Co. vs. Lightheiser, 168 Ind. 438, 78 N.E. 1033. . . 79 

Prevette vs. U.S., 68 Fed. (2d) 112 74 

Prosser vs. Montana Central Ry. Co. (Mont.), 43 Pac. 81 71 

Quaker Oats Co. vs. Grice, 19 Fed. 441 (CCA. 2) 71 

11 R.C.L., page 583, paragraph 14 78 

Report by Senator Shortridge from the Committee on Finance, dated 
June 9, 1930, and known as Report No. 885 of the 71st Congress, 
second session, to accompany Calendar No. 906, on page 4 thereof. . 73 

Reynolds and Heitson vs. Henry, 185 N.W. 67; 193 Iowa 164, 167 66 

Roberts vs. Ogdensburgh Etc. R. Co., 29 Hun. (N.Y.) 154 83 

Rohrer vs. Schreiber, 223 Mich. 355, 193 N.W. 905 80 

Rost vs. Brooklyn Heights R. Co., 10 App. Div. 477, 41 N.Y.S. 1069. 83 

Runkle vs. U.S., 42 Fed. (2d) 804 (CCA. 10) 77 

Russell's Estate, 210 Pac. 249 (Cal.), 189 Cal. 759 74 

Sampson vs. St. Louis Etc. R. Co., 156 Mo. App. 419, 138 S.W. 98. . 81 

Scalf vs. Collin County, 80 Tex. 514, 16 S.W. 314 78 

Schroeder vs. Chicago Etc. R. Co., 47 Iowa 375 80 

Searles vs. Northwestern Mutual Life Ins. Co., 148 la. 65, 126 N.W. 

801 ; 29 L.R.A. (N.S.) 405 77 

Seerie vs. Brewer, 40 Colo. 299; 90 Pac. 508; 122 Am. St. Rep. 1065. . 70 

SekinofF vs. N.P. Severin Co. (CCA. 9), 53 Fed. (2d) 753 67 

Seltzer vs. Saxton, 71 111. App. 229 79 

Shwab vs. Doyle, 269 Fed. 321 at 333 74 

Sorvik vs. U.S. (CCA. 9), 52 Fed. (2d) 403 67, 69 

South Bend vs. Turner, 156 Ind. 418, 83 A.S.R. 200, 54 L.R.A. 396, 

60 N.E. 271 83 

Southern R. Co. vs. Brock, 132 Ga. 858, 64 S.E. 1083 78 

Spring Company vs. Edgar, 99 U.S. 645; 25 L. Ed. 487 73, 76 

State vs. Cox, 172 Minn. 226; 215 N.W. 189 77 

Stebbins vs. Duncan, 108 U.S. 32, 2 S. Ct. 313, 27 L. Ed. 641 71 

Stephens vs. Elliott, 36 Mont. 92, 92 P. 5 81 

St. Louis, Etc. Co. vs. Edwards, 24 CCA. 300; 78 Fed. 746 74 

St. Louis Etc. R. Co. vs. Mathis, 101 Tex. 342, 107 S.W. 530 82 

41 Stat. 371, 38 U.S.C.A. 473 75 

Storey vs. U.S., 60 Fed. (2d) 484 (CCA. 10) 69, 72 

Sullivan vs. U.S. (CCA. 9), 32 Fed. (2d) 992 65 

S.W. Metals Company vs. Gomez, 4 Fed. (2d) 215, 218 73 

8 



Page 
Swift vs. O'Neill, 88 111. App. 162, affirmed 187 111. 337, 58 N.E. 416. 79 

Swift & Co. vs. Rutkowski, 182 111. 18, 54 N.E. 1038 78 

Taylor vs. Town of Monroe, 43 Conn. 36 75 

Texas Midland R. Co. vs. Brown (Tex. Civ. App.), 58 S.W. 44 82 

Texas & Pacific R. Co. vs. Watson, 190 U.S. 287, 23 S. Ct. 681, 47 L. 

Ed. 1057 76 

Thompson vs. Webb, 5 Kan. App. 879 mem., 48 P. 752 80 

Tijan vs. Illinois Steel Co., 158 111. App. 30, affirmed 250 111. 554, 95 

N.E. 627 79 

Title 38, U.S.C.A., section 515 72 

Transportation Line vs. Hope, 95 U.S. 297; 24 L. Ed. 477 76 

Turnbow vs. Kansas City Rys. Co., 277 Mo. 644, 211 S.W. 41 (Legs.) 81 

Turon vs. Chicago City Ry. Co., 152 111. App. 351 79 

Twohy Bros. Co. vs. Kennedy, 295 Fed. 462 (CCA. 9) 71 

Union Insurance Co. vs. Smith, 124 U.S. 405, 8 S. Ct. 534, 31 L. Ed. 

497 76 

U.S. vs. Albano, 63 Fed. (2d) 677 (CCA. 9) 69, 72 

U.S. vs. Alger (CCA. 9), 68 Fed. (2d) 592 67, 68, 70, 72 

U.S. vs. Auer, 51 Fed. (2d) 921 (CCA. 3) 75 

U.S. vs. Barker, 36 Fed. (2d) 556 73, 75 

U.S. vs. Baxter, 62 Fed. (2d) 182 (CCA. 9) 69, 72 

U.S. vs. Burke, 50 Fed. (2d) 653 (CCA. 9) 69 

U.S. vs. Burleyson, 64 Fed. (2d) 868 (CCA. 9) 69, 72 

U.S. vs. Clapp, 64 Fed. (2d) 793 67 

U.S. vs. Crain, 63 Fed. (2d) 528 (CCA. 7) 75 

U.S. vs. Dudley, 64 Fed. (2d) 743 (CCA. 9) 68, 69, 72, 74 

U.S. vs. Ellis, 67 Fed. (2d) 765 (CCA. 5) 74 

U.S. vs. Francis, 64 Fed. (2d) 865 (CCA. 9) 69, 72, 74 

U.S. vs. Fritz, 66 Fed. (2d) 300 (CCA. 3) 75 

U.S. vs. Fry (CCA. 4), 71 Fed. (2d) 423 70, 72 

U.S. vs. Godfrey (CCA. 1), 47 Fed. (2d) 126 68 

U.S. vs. Griswold, 61 Fed. (2d) 583 (CCA. 9) 69 

U.S. vs. Gwin. 68 Fed. (2d) 124 (CCA. 6) 75 

U.S. vs. Jensen, 66 Fed. (2d) 19 (CCA. 9) 69, 72, 74 

U.S. vs. Law, 299 Fed. 61 (CCA. 9) 75 

U.S. vs. Law, 299 Fed. 61 (CCA. 9), reversed on other grounds, 266 

U.S. 494, 69 L. Ed. 401, 45 S. Ct. 175 75 

U.S. vs. Lawson (CCA. 9), 50 Fed. (2d) 646 68, 69, 72, 74 

U.S. vs. Lesher, 59 Fed. (2d) 53 (CCA. 9) 69 

U.S. vs. Lumbra, 63 Fed. (2d) 796 (CCA. 2) 67, 73, 75 

U.S. vs. McGrory, 63 Fed. (2d) 697 (CCA. 1) 75 

U.S. vs. Meserve, 44 Fed. (2d) 549 (CCA. 9) 69, 75 

U.S. vs. Messinger, 68 Fed. (2d) 234 (CCA. 4) 74 

U.S. vs. Monger, 70 Fed. (2d) 361 (CCA. 10) 67, 74 

U.S. vs. Phillips (CCA. 8), 44 Fed. (2d) 689 at 691 68 

U.S. vs. Ranes, 48 Fed. (2d) 582 (CCA. 9) 68 

U.S. vs. Rasar (CCA. 9), 45 Fed. (2d) 545 68, 69, 72 

U.S. vs. Riley, 48 Fed. (2d) 203 (CCA. 9) 69 

U.S. vs. Sauls, 65 Fed. (2d) 886 (CCA. 4) 74 

U.S. vs. Scarborough, 57 Fed. (2d) 137 (CCA. 9) 69 

U.S. vs. Smith (CCA. 9), 55 Fed. (2d) 141 65 

9 



Page 

U.S. vs. Smith, 68 Fed. (2d) 38-39 67 

U.S. vs. Sorrow, 67 Fed. (2d) 372 (CCA. 5) 69, 74 

U.S. vs. Suomy, 70 Fed. (2d) 542 (CCA. 9) 69, 72 

U.S. vs. Thomas, 64 Fed. (2d) 245 (CCA. 10) 74 

U.S. vs. Tyrakowski (CCA. 7), 50 Fed. (2d) 766 68, 74 

U.S. vs. Wilfore, 66 Fed. (2d) 255 (CCA. 2) 67 

U.S. vs. Woltman, 57 Fed. (2d) 418 (C of A., D.C) 74, 77 

U.S. vs. Worley, 42 Fed. (2d) 197, 199 (CCA. 8) 75 

U.S. Radiator Corp. vs. Henderson, 68 Fed. (2d) 733 (CCA. 10), cert. 

denied 292 U.S.' 650 77 

U.S. Smelting Co. vs. Parry, 166 Fed. 407 (CCA. 8) 76 

Vance vs. Monroe Drug Co., 149 111. App. 499 79 

Vance vs. U.S. (CCA. 7), 43 Fed. (2d) 975 ' 68 

Van Norden vs. Chas. R. McCormick Lumber Co. (CCA. 9), 17 

Fed. (2d) 568 65 

Waddell vs. Guthrie, 45 Fed (2d) 977 67, 68 

Walsh vs. Chicago Rys. Co., 303 111. 339, 135 N.E. 709 78 

Watson vs. Hardaway-Covington Co., 137 So. 33 (Ala.) 77 

West Chicago St. R. Co. vs. Grenell, 90 111. App. 30 79 

Western Coal & Mining Co. vs. Berberich, 94 Fed. 329 (CCA. 8). . . 77 

White vs. U.S., 53 Fed. (2d) 565 (CCA. 5) 75 

4 Wigmore on Evidence (2d Ed.), Sees. 1920 and 1921 74 

Williams vs. Marini, 162 Atl. 796 71 

Williamson vs. U.S., 207 U.S. 425, 451, 28 S. Ct. 163, 52 L. Ed. 278 . . 76 

Wills vs. Browning, 161 Mo. App. 461, 143 S.W. 516 81 

Wise vs. U.S. (CCA. 5), 63 Fed. (2d) 307 68 

Wolf vs. Crook, 163 111. App. 511 79 

Wood vs. Morris & Co. (N.J. Supp.), 126 A. 434 81 

Wood vs. Weiman, 104 U.S. 786, 795; 26 L. Ed. 779 71 



10 



IN THE 



Qltrrmt Olflurt of Ap^j^ab 

JFur % Ntntly ffltrrmt 



UNITED STATES OF AMERICA, 

Appellant, 

VS. 

PARK LUSK, Appellee. 



BRIEF OF APPELLEE 



C7pon Appeal from the District Court of the United States 
for the District of Idaho, Eastern Division 



STATEMENT OF THE CASE 

We would but add to the statement of the case as 
presented by appellant in its brief filed herein, in the 
third line of its statement the month is shown as 
"January," this should be "February." And on page 
11 of its brief the date shown as "October 29, 1933," 
should be "October 25, 1933." 

We repeat for emphasis the fact that after the issues 
were joined there were certain stipulations entered into 
at the opening of the trial so that "The remaining 
material issue was the question of total and perma- 
nent disability from the alleged causes as set forth in 
the complaint from a time within the effective dates 
of said policy of insurance, that is to say, April 25, 
1918, until midnight of June 30, 1919." We would 



12 United States of America 

also add that the verdict of the jury was returned on 
October 20, 1933 (Tr. 30). And the judgment in said 
cause was filed October 20, 1933 (Tr. 29). 

Appellant's demurrer to appellee's complaint was 
filed April 12, 1932 (Tr. 14) and overruled by the 
Court June 2, 1932, and appellant given sixty days 
from date of said overruling in which to answer (Tr. 
15), and said answer was filed January 11, 1933 (Tr. 
16). 

STATEMENT OF FACTS 

In order to have conveniently for the Court and 
counsel for study and review, and to more fully and 
completely, and, as we view it, in a more orderly way 
have before us the facts as brought out during the 
trial, we respectfully present here a statement of the 
facts, taken from the narration of the evidence as 
embodied in the transcript of the record, and especially 
as bearing upon the issues involved, and we shall pre- 
sent them in this brief in the following order, and 
under the following subdivisions: 

THE INJURY AND DISEASE 

a. Immediate effects. 

b. Permanency. 

MEDICAL ATTENTION 

a. During military service. 

b. Findings and diagnoses by defendant's 
physicians. 

c. Findings and diagnoses by civilian doctors. 

d. Home remedies and treatments. 



vs. Park Lusk 13 

DISABILITIES, PAIN AND SUFFERING 

a. As related by appellee. 

b. As observed by laymen. 

c. As found by physicians. 

d. Opinion evidence by physicians. 

WORK AND EMPLOYMENT RECORD 

a. After injury during military service. 

b. Between military service and date of trial. 

c. Effect of work or efforts to work upon his 
physical condition. 

d. Assistance by others. 

THE INJURY AND DISEASE 

(a) Immediate Effects. Appellee went into action on 
the war front September 26, 1918, having been held 
in reserve five or six miles back of the firing line for 
a period of two or three weeks preceding that (Tr. 74) ; 
and for a period of approximately three weeks he had 
no change of clothing, his clothing was wet and muddy, 
it raining practically all of the time (Tr. 74). It was 
open warfare; he was sergeant over twenty-four men 
handling machine gun carts and ammunition carts 
(Tr. 74). For about a week they were moving back 
and forth, crossing the Marne three times, constantly 
engaged in active warfare, ending in a battle labeled 
''Bloody Sunday," which in the words of appellee was 
because 'The blood ran like water" (Tr. 75). 

On the 10th of October they ran into a gas shell, 
and while he was helping put gas masks on the horses, 
a horse threw his head and knocked his mask off, and 



14 United States of America 

as he described it, *'I got an awful dose of gas," and 
it was three or four minutes before he could get his 
mask back on. He then turned sick, laid down and 
''passed out," and as best he could remember it was 
forty or fifty minutes before he came to (Tr. 76). He 
was awful sick and weak, had pains in his stomach, 
his eyes ran, and his nose hurt, and a little later his 
chest started to pain, and in an hour or two he started 
to vomit. Shortly thereafter as they advanced, and 
within three or four hours after he was thus gassed, 
he again started to vomit and had dysentery (Tr. 76). 
This continued until he became so weak he could not 
go on with the company (Tr. 77). He was too far 
away from the ambulance lines to walk, therefore he 
rode a horse along with the company for a couple of 
hours, and finally **got cramps so bad and vomiting" 
he couldn't stay on the horse and was then transferred 
to, and rode on the machine gun cart until about mid- 
night, then put in an ambulance and to a field hos- 
pital, remaining there a week, and from there to the 
Base Hospital, where he remained for nine weeks. The 
only medicine he received, so far as he remembered, 
was that of receiving pills. The pills helped the cramps 
in his stomach (Tr. 77). Then to the Base Hospital at 
Meuse, remaining there about nine weeks, being dis- 
charged from there December 18, 1918, at which time 
he was still suffering from the vomiting and dysentery, 
and with his eyes (Tr. 77). He had pains in his lungs 
and in his stomach, high fever, headache, and his eyes 
would run and hurt. There was some relief to the pain 
in his eyes and the pains in his chest while in the 
Base Hospital (Tr. 78). 



vs. Park Lusk 15 

He was then with his company at Ige in France, 
remaining until about the middle of March, but he 
did not participate in the performance of his duties as 
sergeant, or do any work or exercise, or drill, or any- 
thing of that nature (Tr. 78). From there, on his 
march to the coast, he was sick at the stomach and 
would vomit, ''and it was awful hard for me to make 
the march, but I made it." Arriving at Long Island, 
U.S. of A., he was still sick and still vomited, and his 
eyes watered and hurt; and when mustered out of 
service he was still sick, still vomiting, still had the 
attacks, and his eyes still hurt and watered; he was 
sick all over and weak. 

Plaintiff's Exhibit No. 3, being the Service Record, 
corroborates appellee's statement to some extent, that 
he entered the hospital about October 14, 1918; cause 
of admission, diarrhea, acute; he was transferred to 
Meszes (evidently should be Meuse); later had diag- 
nosis of diarrhea, and also pneumonia while at Base 
Hospital No. 89 (Tr. 93). 

He had a little cut on his right hand caused by a 
piece of shrapnel; he had burns on his skin (Tr. 90). 
About four weeks after he went to the hospital the 
rubbing of his leg caused the top skin to come off, and 
he could take his thumb and just get '*a whole gob of 
dry skin" (Tr. 90). 

(b) Permanency. The pains and suffering as de- 
scribed in the immediately preceding paragraph have 
not left him and he still had them at the time of the 
trial. 'T don't vomit so often, but I have pneumonia 
practically every winter" (Tr. 78). And these pains 



16 United States of America 

and suffering have been with him continuously since 
the gassing. 

(The corroboration as to this will be later discussed, 
under the title ''Disabilities, Pain and Suffering, as 
Observed by Laymen".) 

MEDICAL ATTENTION 

(a) During Military Service. As already indicated 
the gas and resultant pains and suffering originated on 
or about the 10th of October, 1918 (Tr. 76); he was 
at a field hospital, later arrived at the Base Hospital 
on or about October 18, being discharged from there 
December 18, 1918, during which time he received 
some pills which helped the cramps in his stomach 
(Tr. 77). And during the nine weeks in the hospital 
they gave him whiskey to keep him quiet (Tr. 72). At 
the Base Hospital in France mornings they would give 
appellee a glass full of alcohol reduced a little with 
hot water and sugar, two little pills and a dose of 
castor oil. That was daily for about five weeks (Tr. 
80). He continued taking these medicines all the while 
he was in France (Tr. 80). He developed during that 
time at the Base Hospital ''pneumonia" (Tr. 93), and 
the hospital there in October, 1918, diagnosed his con- 
dition "gas attack, gas stomach, poison stomach" (Tr. 
93). And after hospitalization he reported back on 
sick call (Tr. 94). 

(b) Findings and Diagnoses by Defendant's Physi- 
cians. Gas attack, gas stomach, poison stomach, diar- 
rhea, acute, and pneumonia (Tr. 93). (During Military 
Service.) 



vs. Park Lusk 17 

Dr. Charles H. Sprague, an employee of the defend- 
ant and appellant here, made an examination of the 
appellee at Pocatello, Idaho, October 23, 1922 (Tr. 
171), and recorded that appellee complained of de- 
cayed teeth and *'a choking sensation when he was in 
a close room and dust" (Tr. 172), and his statement 
was that he ''found nothing wrong with him except 
badly decayed teeth" (Tr. 172). And while he states, 
"His eyes were perfectly normal at that time," he fur- 
ther adds, ''I made the usual examination of his eyes, 
and then I referred him to a specialist." Appellee had 
a little rash on his skin, a few little spots on his right 
shoulder (Tr. 175). ''I found no evidence of gastro- 
intestinal poisoning from gas. There is no such thing 
as gas poisoning" (Tr. 176). 

Dr. G. E. Riggs examined appellee September 21, 
1931 (Tr. 177). 

Appellee gave a history of having been constipated, 
and having pains in the abdomen, and having pains 
and vomiting after meals (Tr. 177). This doctor made 
no examination in regard to ear, eye, nose, and throat 
condition (Tr. 178), his examination being directed to 
stomach complaint and complaint of his feet (Tr. 179). 
He found moderate auto-intoxication (Tr. 179). It was 
not his custom in making examination to depend very 
much upon the history given him by the patient (Tr. 
180). "I paid very little attention to the history which 
this man gave me" (Tr. 180). Appellee stated that he 
had cramps in his stomach and vomited frequently 
twenty minutes to half an hour after breakfast, and 
that he vomited after supper (Tr. 180). "My examina- 
tion was confined to the particular disabilities and dis- 



18 United States of America 

eases to which I have testified. As to any other dis- 
abiUties which may have existed I express no opinion 
whatsoever" (Tr. 180). 

Dr. P. J. Germon, referring to appellee's Exhibit 
No. 11, which he read (Tr. 181), it being an X-ray 
plate of appellee's lungs (Tr. 153), and Dr. Germon 
stated, ''There is no evidence of pathology on either 
side" (Tr. 182). "The condition of the bronchial area 
as disclosed by this photograph is, they are possibly 
slightly exaggerated" (Tr. 182). He also examined 
appellee and made an X-ray plate, being defendant's 
Exhibit No. 10, this being on September 21, 1931, and 
he reports the history as given him by appellee at that 
time — that he was gassed in Argonne Forest in No- 
vember, 1918, went to Base Hospital for nine weeks, 
and also had pneumonia, and that he had pneumonia 
three times since service, that appellee had no doctor, 
but his wife took care of him in 1920, 1921 and 1926. 
Bowel movements are irregular, two or three days 
without moving, then he will have diarrhea, then con- 
stipation sets in and he must use laxatives. This 
condition being present since service. Appellee has 
cramps in his stomach, usually after breakfast or sup- 
per, twenty minutes to half an hour after meals until 
he vomits. Dizziness. Spells ten to fifteen minutes 
duration (Tr. 183). 

Dr. Germon's findings in September, 1931, were: "A 
well developed and nourished white male of 35 years 
of age, of ruddy complexion. Does not appear acutely 
ill, although eyes show some irritation * * * It is 
inflammation of the white portion of the eyes, in other 
words, they are bloodshot, and red blood vessels are 



vs. Park Lusk 19 

seen over the white part of the eyes" (Tr. 184). "From 
the examination I made and the history here, this man 
should be able to work. He could do almost any 
work" (Tr. 188). Dr. Riggs (above referred to) was 
a surgeon at the Veterans' Bureau at the time of the 
examination. He made one surgical examination * * * 
it was limited to the stomach and feet (Tr. 190). 

"At the time of my (Dr. Germon) examination 
the liver and spleen showed no abnormality. I 
limit it to that time." (Tr. 191.) "He had chronic 
constipation (Tr. 191). It is not unusual to have 
diarrhea and constipation alternately and he made 
that statement to me. I have no reason to dis- 
pute his word. The man came to me and I found 
constipation, and usually the two conditions, 
which are opposite, are not found at the same 
time. Usually we have constipation after diar- 
rhea (Tr. 191). I heard the testimony of plain- 
tiff as to taking his thumb and scaling off his skin 
after the poisoning in France. I do not believe 
that could not occur (Tr. 191). 

"I do not agree with Dr. Sprague (quoted 
above) that this patient's trouble is imaginary 
(Tr. 193-4). If it is true that plaintiff had trouble 
with working in dust, or a closed room, it prob- 
ably would make a difference with my opinion. 
Gas poisoning does destroy tissue" (Tr. 194). 

(c) By Civilian Doctors. Dr. C. P. Groom (Tr. 149) 
examined appellee first time in February, 1925, and 
prescribed for him for gastro intestinal diarrhea (Tr. 



20 United States of America 

150). Later he made a physical examination in Octo- 
ber, 1931, and X-ray examination in 1931. 

(d) Home Remedies and Treatments. Mrs. Dave Lusk 
(Tr. 53) testified that appellee remained with us 
(her home) from 1919 until about 1927 (Tr. 55). She 
applied mustard plasters on his chest and back, she did 
that many times, also her husband and appellee's 
mother (Tr. 55). 

Mrs. Park Lusk, who married appellee October 24, 
1927 (Tr. 66): Every winter she has had to doctor 
appellee for slight attacks of pneumonia, and would 
put mustard plasters on him and give him mustard 
baths, and appellee would take some medicine (Tr. 
69). Sometimes he would take medicine throughout 
the year. We would get some prescriptions, and some 
just patent medicines (Tr. 70). Appellee has been on 
a bread and milk diet ever since he came home. That 
is all he ever eats in the evening since I have lived 
with him (Tr. 70). During this period Dr. Groom pre- 
scribed for him, that is, he prescribed for appellee 
before this marriage but appellee is still taking the 
medicine (Tr. 71). 

Appellee testified that he has had the prescription 
given to him by Dr. Groom in 1925 refilled, and at the 
time of the trial was still taking the medicine (Tr. 81). 
This medicine was a glass of alcohol every morning, 
noon, and night, diluted with hot water, and he has 
kept it all these years, and at the time of the trial still 
continued to take it. He does not know it is alcohol 
but from its taste assumes so (Tr. 94). 

He has taken several home remedies that his mother 



vs. Park Lusk 21 

used when he was a child (Tr. 81). When he becomes 
constipated he would take salts, when his lungs would 
choke up, and he would get those pains, he would use 
mustard plasters. When he first came home his wife 
applied them, and then after his wife's death, and 
when he was living with his sister-in-law she applied 
them. Mustard plasters were applied steadily all win- 
ter every winter (Tr. 81). If a damp spell comes on 
through the summer or fall or spring, he would also 
apply them. The mustard plasters being applied for 
the pains in his lungs, both back and front (Tr. 81). 

DISABILITIES, PAIN AND SUFFERING 

(a) As Related by Appellee. In addition to the dis- 
cussion under "The Injury and Disease, subdivision (a) 
Immediate Effects, and (b) Permanency," as hereto- 
fore set forth, we would add: When milking cows in 
the morning, he would have severe vomiting spells and 
pain in his stomach, and be compelled to quit (Tr. 82). 
His brother and brother's wife and his own wife would 
complete the work. At other work he would not con- 
tinue until the work was completed, because he would 
get those gas pains in his stomach and it would start 
him vomiting, he would get so weak he couldn't sit on 
the mower. He had pain in his head and his eyes hurt 
him a lot (Tr. 82). He tried to plow off and on through 
the season, the dust would get in his throat and lungs, 
choked him up and his eyes would run and he couldn't 
see, and he would take those vomiting and cough- 
ing spells, and he would sit down twenty minutes 
to half an hour, and sometimes those things would 
clear up and he would try to work again (Tr. 82). 



22 United States of America 

There were times in the morning when he couldn't go 
out, and after he had vomited he would still have 
those gas pains, and his brother would go out and 
take the team and appellee would stay in the house 
(Tr. 82-3). A little liquor usually helped him, stopped 
the pain and checked the vomiting (Tr. 83). He quit 
work (on the combine) because he got so sick and 
choked up so bad he couldn't work. The dust caused 
him to choke. He would start coughing and his voice 
would get down to a whisper, he would get off the 
machine and cough and usually vomit (Tr. 83). In 
going to the canyon for wood he tried to help chop, 
wouldn't have the wind to use an axe; and in helping 
load the wood it would gripe his stomach every time 
he would get hold of a stick, and there would be pains 
in his stomach and chest (Tr. 84). Drilhng the dust 
would choke him up, bring pains in his chest and his 
eyes would water and pain and burn. His brother 
would split the sacks for him, that is put the grain in 
half sacks, because it hurt him to lift a full sack, and 
vomiting resulted if he strained any (Tr. 84). In plow- 
ing he would not continue throughout the season be- 
cause he would get choked up with dust, and pains in 
his chest, and his eyes would water (Tr. 85). In har- 
rowing, because there was more or less dust, it hurt 
him worse than anything else (Tr. 85). When running 
the weeder, the dust was so bad that he could not 
complete the work and his brother would usually com- 
plete it (Tr. 85). His vomiting isn't as bad as it was 
the first two years after he came home, his eyes are 
worse, he still has trouble with his lungs, they are 
about the same; and the effect upon him resulting from 



vs. Park Lusk 23 

undertaking work has been similar to that as just de- 
scribed throughout the years since he came back from 
the service (Tr. 86). When plowing at times he would 
take coughing spells and start vomiting, and on other 
days when the wind would be so that it would sweep 
the dust on him it would choke him up (Tr. 86-7). 
When he would choke up he would have to quit, and 
would have pains in his chest, difficult for him to 
breathe, his eyes would water worse, and it always 
hurt him to lift sacks, causing him pains in the stom- 
ach; he would get dizzy and everything would go black 
and he "would keel over" (Tr. 87). He would have 
those dizzy spells every time he exerted himself. Some- 
times they would come upon him when he was just 
sitting around (Tr. 87). So far as he could notice it, 
and the effect upon him, the fainting spells were about 
the same as his unconsciousness in France, although 
he did not "stay out so long" (Tr. 88). He averaged 
five or six days a year (Tr. 88) on the so-called road 
work, which will be hereinafter referred to under 
"Work and Employment Record" — he did not work 
steady. There would be mornings when he would take 
to vomiting and was too weak. He felt weak at 
times, would have that griping in his stomach and 
pains in his chest and lungs (Tr. 89). 

Appellee lived on a diet of bread and milk for supper 
ever since he returned from the army (Tr. 90). About 
four weeks after entering the hospital in France, when 
rubbing his leg, the top skin all came off, and "I kept 
digging away until I could take my thumb and just 
get a whole gob of dry skin. That continued a week 
before it all came off" (Tr. 90). At the time he was 



24 United States of America 

treated by Dr. Groom (1925) and prior thereto he had 
a bad stomach, vomiting spells, lungs gave him trouble, 
he had pain, was choked up with pneumonia (Tr. 95). 

(b) As Observed by Laymen. Mrs. Dave Lusk, not 
only the wife of a brother of appellee, but also a sister 
of appellee's first wife, saw appellee just before he left 
for the military service and after he returned he came 
right to her home and stayed with her family seven 
months. He was much lighter in weight, had a ter- 
rible cough and his eyes were bad; they were inflamed 
and running; he had a sore on his hand (Tr. 53). 
After breakfast he (appellee) would go outside and 
vomit his breakfast. There was a log on the north 
end of our house and he used to make for there and 
he would lean on the log and lose his breakfast. That 
happened every morning. At times he would vomit his 
supper (Tr. 54). He did not go out to the field as 
early as the other men, and sometimes he would re- 
turn to the house about eleven or eleven-thirty and 
rest until noon; he would come into the house and lie 
down, would sit with his hands in his lap and his head 
down (Tr. 54). He would take these coughing spells 
and cough until he would vomit. He (appellee) remained 
there until about 1927, just taking home remedies 
(Tr. 55). 

The witness Bishoff, in working with the combine, 
noticed the dust bothered appellee and made him 
cough, and also bothered his eyes so that he could 
not do all of his work (Tr. 37). Appellee worked all 
day long for a couple of days of the five days work 
in connection with the combine, the other three days 
he laid off, while working with this witness (Tr. 39). 



vs. Park Lusk 25 

The witness Leishman observed his puffing, loud 
and wheezy Hke and breathing hard when working 
(Tr. 40) and observed his getting up in the night, sit- 
ting up in bed and coughing, that being the usual 
thing during the month that he slept with him during 
1925, observed the plaintiff vomiting, and that would 
occur about a half hour or hour after breakfast (Tr. 41). 

The witness, J. N. Williams, worked with appellee 
at odd jobs, such as fixing a well, hauling wood, killing 
pigs, etc., and appellee would cough a lot and wheeze 
when he was doing anything heavy, especially heavy 
lifting. He would then sit down and rest while the 
others continued on with their work, these resting pe- 
riods being fifteen or twenty minutes at a time (Tr. 43). 

The witness, Humphrey, observed the appellee while 
he was driving a combine. They had about 200 acres 
of grain to cut, requiring about ten days, and the 
appellee lost about two and a half days during that 
period (Tr. 44). Appellee was hoarse and had a bad 
cough and whenever he started to work he would 
have a short coughing spell. He was not hoarse when 
they started this work (Tr. 45). Appellee, in connec- 
tion with this work, while driving "would call for a 
five once in a while," and this was explained to mean, 
"Calling for a five means to stop and rest." This wit- 
ness further explained the condition of his voice by 
the illustration when he started the team, in place of 
throwing the machine in gear, as most men did, on 
account of his voice, he started his team first and then 
threw the machine in gear (Tr. 46). His eyes were 
bloodshot and red. Appellee drove the horses all right 
but would stop his machine and rest five minutes occa- 



26 United States of America 

sionally. His principal difficulty in connection with 
that work was his hoarseness, and he couldn't talk to 
the horses (Tr. 46), 

The witness J. E. Butler saw the appellee just before 
he started for the army and then again about a week 
or ten days after his return. Upon his return his voice 
was heavy, hoarse like (Tr. 47). The appellee was pos- 
sibly 25 to 30 pounds lighter in weight upon his return ; 
his eyes were bloodshot. He was awfully irregular in 
his work. He saw Mr. Lusk squatting on his heels 
and apparently trying to get up; he couldn't make it 
and fell to his hands and knees and crawled six or eight 
feet and stayed there on his hands and knees for a 
little bit and finally got up (Tr. 84). In connection 
with the so-called road work, this witness was with 
him, he apparently was there at times and at other 
times he had to quit driving the team; appellee would 
then sit by the camp fire; he left his job at times. 
When he left the job some one else would take his 
place (Tr. 48, 49). 

Archie N. Noble, in regard to the farm operations, 
stated: ''He (appellee) used to get up early in the 
morning and get his horses; he would meet me at the 
gate and we would harness them together. I would 
go on to my field and after I had been down there an 
hour or so, he would come to his field. He was always 
late getting out to work. He walked slow. He did not 
work like he had much ambition or desire to get 
through and carry on like a man does during the busy 
season. One or two mornings he didn't start at all, or 
until nearly noon. He just worked and looked like 
he didn't have any incentive in his work (Tr. 56-57). 



vs. Park Lusk 27 

David Lusk, a brother, met appellee at the depot 
on the day when he returned from war, and stated 
that before appellee went away he was a great hand 
to go to dances and play ball. After he came back he 
never did go to dances or play ball again. He would 
sit around the house with his head in his hands, his 
eyes were bloodshot, he had a cough. If he got in any 
dust, the cough got worse and he got hoarse. When 
he put any exertion into his work, lifting, such as 
handling wheat sacks, he got short of breath, he would 
puff awfully, and he is that way now (at the time of 
the trial). All of those things have continued from the 
time he first came home until the present (Tr. 58). 
Before he (appellee) went to war he used to haul 
wheat sacks to market. When he came back he could 
not do that. He tried; he couldn't lift them. He could 
lift it up but he couldn't load it up (Tr. 59). When 
appellee tried to harrow he got all choked up with the 
dust and his eyes would run (Tr. 60). In harvesting 
with a combine appellee's eyes would run and he 
would cough and get short of breath, and would have 
to stop and get off the machine and sometimes leave 
the job entirely, other times sit down and rest awhile, 
drink some water and clear it up, those periods of rest- 
ing lasting from fifteen to thirty minutes, and the 
number of times this would occur depended on the 
dust (Tr. 61). In bringing in wood from the hills after 
the war appellee would hit a few licks (in chopping 
wood), then sit down and rest, then get up and chop 
some again. When he chopped a while he would sit 
down and cough, he got out of wind (Tr. 62). After 
he came back from the service, after breakfast he 



28 United States of America 

would go out and vomit. This was practically every 
morning for the first year and after the period, I have 
seen him vomit (Tr. 64). 

Mrs. Park Lusk, who married appellee in October, 
1927, but who had known the appellee for a period of 
twenty-two years (Tr. 66), testified when she first met 
appellee after his return from the service she noticed 
he couldn't talk — ''Well, I couldn't understand what 
he said" — observed his eyes were awfully bloodshot 
and watery; he was nervous and had lost weight (Tr. 
67). If appellee exerted himself a little it would cause 
him to cough and he would vomit. That is true of 
any exertion he makes (Tr. 68). Her husband would 
turn sick after meals and sometimes as soon as he 
could, he would get out of the house, being sick at 
the stomach. This would also occur when she was in 
the field with him (Tr. 69). Appellee was on a bread 
and milk diet ever since he came home. That is all he 
ever ate in the evenings (Tr. 70). The coughing spells 
are not alone caused by dust but they would also 
occur every morning when appellee first gets up and 
through the night (Tr. 71). She observed appellee in 
a dizzy spell when he fell off the plow (Tr. 73). 

(c) As Found by Physicians. Dr. Ellis Kackley, in 
the practice of medicine thirty-six years, also in the 
military service during the war, assigned to the duties 
of a surgeon in the military service, and who was in 
the front line service under fire, and there had occa- 
sion to see and take care of men who had been gassed 
in warfare, and he administered more than first aid 
(Tr. 107), testified he was familiar with the poison gas 



vs. Park Lusk 29 

used by the Germans and its effect upon those affected 
either internally or on the surface. It is irritating to 
the skin, and if you inhaled it, it was destructive to 
the lung tissue and in some cases would make you sick 
to your stomach, and a good deal of it was irritating 
to the eyes and it would burn the skin until it would 
slough off. It will make the surface of the skin red 
and itchy and sore. If the gas is very severe on the 
surface of the body it will blacken and break it down 
and it will slough and peel off and really looks just 
about the same as a fire burn. Inhaling it is very 
destructive to the lungs; the first thing would be a 
congestion, a feeling of impending death, like you 
couldn't get your breath. The symptoms or ordinary 
indications that can be observed by ordinary people 
are coughing and vomiting, and any place the gas 
comes in contact with, the eyes, stomach or lungs, it 
will have an effect (Tr. 108). The disease or diseases 
which follow within a week or two or three after the 
gassing is: the stomach is irritated, the eyes are very 
sore, and the lungs seem like they are not able to get 
enough air in them. Patients complain of lack of air. 
It seems like the air tubes are so congested that they 
are closed. We generally give morphine to soothe the 
patient. If they were badly burned — well, on the front 
we were very limited to drugs, and generally gave 
whiskey or morphine. That was all we had to give in 
the American army. In the French army we didn't 
have alcohol, but we would give them wine. We would 
put somxC water in it for very few men could drink the 
straight alcohol (Tr. 109). 

This doctor's findings upon his examination of the 
appellee were, his chest seems to be sunken in and 



30 United States of America 

there are rales in both lungs, and the expansion is im- 
perfect — bilateral; there are rales and dullness in the 
lungs. The lung was impaired (Tr. 109-110). He illus- 
trated to the Court and jury the marks of gas on 
appellee's back and the scars on his body looked like 
the scars he (Dr. Kackley) finds from mustard gas. 
The history of the disease and of conditions are of 
importance to a medical man in arriving at an ultimate 
diagnosis (Tr. 111). 

Dr. Kackley was in the Argonne battle in Septem- 
ber and October, 1918 (Tr. 137), and he knew that 
they (the Germans) would throw over tear gas and 
mustard gas. "They threw that over to get us to 
vomiting so we couldn't keep our masks on" (Tr. 138). 
He doesn't agree with the alleged reports as to the 
effect of gas: 

''Q. That gas, if it is to have any effect on you, 
if it is going to run into some other condition, it 
will take place within six months. Isn't that right? 

"A. That's what they all say. 

"Q. You don't agree with the government? 

''A. No, sir, I done got some of that gas and 
the government didn't." (Tr. 143.) 

In the service they gave alcohol for gas and every- 
thing else (Tr. 143). Appellee's lungs are not getting 
sufficient air (Tr. 146). He wouldn't have air enough 
to announce trains at a depot, it takes a lot of lung 
power for that. He couldn't run an information desk. 
He would have to talk too much. He might handle 
book work, but he has not got education enough. He 
couldn't do the work you (cross-examiner Garvin) are 



vs. Park Lusk 31 

doing. He couldn't talk like you do and make a living 
out of it. He couldn't do anything that takes as much 
air as that and make a living. When there is a blue 
complexion, there is lack of air (Tr. 147). Diarrhea 
is a fearful disease the way we had it over there (Tr. 
148). 

Dr. C. P. Groom was also in the military service 
during the war (Tr. 149), studied works and govern- 
ment reports by those who have specialized in diseases 
growing out of injuries to the human body as a result 
of gas poison (Tr. 150). In 1925 he prescribed for 
appellee for gastro-intestinal diarrhea, and in 1931 he 
made a thorough examination, and exclusive of history 
of the case, his findings were that appellee had con- 
junctivitis, inflamed throat and larynx from laryngitis, 
a cough. In his lungs he had a number of coarse and 
fine rales over both front and back surface of his lungs; 
he had considerable caving in or shrinking away of his 
clavicular spaces; he had dullness, a flatness on per- 
cussion on the upper part of his chest and other areas 
of his chest, and pain and tenderness in his abdomen 
(Tr. 150-151). Based upon that examination and those 
findings only and without a history, his diagnosis was 
chronic conjunctivitis, chronic laryngitis, inflammation 
of the larynx, and trachea, chronic bronchitis and a 
good deal of pain over his abdomen due to some par- 
ticular condition (Tr. 151). A history of the man's 
case would aid him in making a final and definite diag- 
nosis and giving an opinion as to his ability or dis- 
ability to perform labor (Tr. 151). 

The symptoms of gas poisoning that show them- 
selves are: the gases were mixed with various chemi- 



32 United States of America 

cals that produced inflammation of the mucous mem- 
branes of the eyes and it produced severe congestion 
of or inflammation of the membranes of the tonsils 
and larynx, which would be likened to a severe sore 
throat. This gas also penetrated down through the 
air passages into the lungs. There was first a burning 
of the bronchii, the bronchial tree and cells. Then due 
to the inhalation of this gas it produced a vomiting 
(Tr. 151), then in a few days, depending on the amount 
of gas taken, these inflamed areas became infected and 
the patient became sick and would have to leave the 
field of action; he was taken to a hospital, and a great 
majority of them who had been gassed severely devel- 
oped a bronchial pneumonia and gastro-intestinal trou- 
ble, and some of the severe burns sometimes developed 
blindness in one eye, and in some blindness in both 
eyes. These conditions went on, and if the condition 
improved from their bronchial pneumonia they would 
have a cough, and sometimes spit up blood and coughed. 
They had a destruction of the mucous membranes of 
the lungs and air passages which resulted in a scar 
tissue and in some cases it shut off their breathing 
(Tr. 152). They would be subject to recurrent attacks 
of bronchial pneumonia, bronchitis and recurrent at- 
tacks of conjunctivitis due to the still lingering in 
their system of the after effects of the poison from this 
gas (Tr. 153). The X-ray plate, plaintiff's exhibit 
No. 11, shows a great many areas radiating out through 
the lungs which show evidences of burning and irrita- 
tion, also deposits of or calcification of these through 
here (illustrating); shows some calcification (Tr. 153), 
portion of the chest, which accounts for some thicken- 



vs. Park Lusk 33 

ing due to serious inflammation he has had in his lung 
as a result of infection (Tr. 154). 

Appellee should stay out in the open and do as 
little physical exertion as possible, staying away from 
sudden changes in temperature and avoid becoming 
over-tired or over-exerted in order to build back his 
health. He could raise stock if he didn't do any physi- 
cal work connected with it. He could not be a watch- 
maker or clerk, post master or mail deliverer, or do 
any kind of clerical work or work at an information 
desk, or at an aviation field (Tr. 161). The only thing 
he could do is take care of himself, conserve his strength 
in order to prolong his life (Tr. 162). Appellee's cough 
is one of the symptoms of a pulmonary condition which 
renders him permanently disabled (Tr. 162). 

Dr. Charles H. Sprague, appellant's witness, exam- 
ined Park Lusk October 23, 1922, and his finding was 
that the appellee had no physical disability whatever. 

Dr. G. E. Riggs, another witness for appellant, ex- 
amined appellee September 21, 1931 (Tr. 177), and 
"Dr. Riggs was a surgeon at the Veterans' Bureau at 
that time; he made one surgical examination. It was 
limited to the stomach and feet" (Tr. 190). Appellee's 
main complaint at that time was stomach trouble and 
Dr. Riggs' examination was directed to this complaint 
(Tr. 177). Appellee was sent to this doctor by the 
Receiving Officer of the medical service with no nota- 
tion other than for him to do a surgical and orthopedic 
examination (Tr. 179). Appellee complained to this 
doctor that he had cramps in his stomach and that he 
vomited frequently, twenty minutes to half an horn- 
after breakfast, and the doctor paid very little account 



34 United States of America 

to the history which appellee gave him (Tr. 180). "My 
examination was confined to the particular disability 
and disease to which I have testified. As to any other 
disabilities which may have existed I express no opin- 
ion whatsoever" (Tr. 180). 

Dr. P. J. Germon, another witness for appellant, 
first read the X-ray plate introduced through appellee's 
witness, Dr. Groom, plaintiff's exhibit No. 11 (Tr. 181) 
and while he disagreed generally as to the reading of 
this X-ray plate, he stated, "The condition of the 
bronchial area as disclosed by this photograph is, they 
are possibly slightly exaggerated" (Tr. 182). "The 
lung appears normal in the photograph" (Tr. 183). 
This could be called mild bronchitis, a mild form, a 
minor form (Tr. 183). He examined the appellee on 
September 21, 1931, and took a history of appellee's 
complaints, among which were the following: Gassed 
in Argonne forest; sent to base hospital for nine weeks; 
had pneumonia; had pneumonia three times since serv- 
ice, had no doctor but his wife took care of him at 
home; bowel movements are irregular, two or three 
days without moving, then he will have diarrhea for 
two or three days, then constipation sets in; cramps 
in stomach usually after breakfast or supper, twenty 
minutes to half an hour after meals, until he vomits; 
dizziness, these spells ten to fifteen minutes duration; 
is on milk diet (Tr. 183) ; can eat meat and vegetables 
for a period of a week at a time without trouble, then 
it starts again and he has to return to a milk diet to 
settle his stomach (Tr. 184). He found conjunctivitis, 
mild, bilateral. It is inflammation of the white portion 
of the eyes, in other words they are bloodshot and red 



vs. Park Lusk 35 

blood vessels are seen over the white part of the eyes 
(Tr. 184). The coated tongue would possibly indicate 
that the elimination is not normal (Tr. 185). Abdomen 
flat muscular (Tr. 185) due to appellee's complaint of 
G.I. disturbances and vomiting. He had to make X- 
rays to determine if there was any pathology (Tr. 186). 
Exhibits 15, 16 and 17 by the defendant were read 
(Tr. 186-187). They were only as to the stomach and 
gastro-intestinal canal. 

He disagreed with the doctors for appellee as to the 
lung examination (Tr. 189). Appellee at this time, the 
time of this examination, had chronic constipation 
(Tr. 191). It is not unusual to have diarrhea and con- 
stipation alternately and he (appellee) made that state- 
ment to me and I have no reason to doubt his word 
(Tr. 191). This doctor having stated on direct exami- 
nation, *'I never came into contact with acute cases 
but I have had cases which had been gassed" (Tr. 189). 
Under cross-examination he attempted to qualify by 
stating: ''I have seen a patient in an acute attack 
and immediately after poisoning in the war. I was in 
one myself. I was burned on the skin. It took three 
weeks to clear it. I have no definite time for the 
clearing in other people. I know my own case. Mine 
was gasohne gas" (Tr. 191-192). And he further stated, 
"After contact with mustard gas we first have an irri- 
tation of the skin, redness, and finally a destruction of 
the skin, depending on the degree of the b\irn. The 
sumptoms of mustard gas poisoning are itching, a red- 
ness, discoloration of the skin (Tr. 192). This doctor 
further states: ''I do not agree with Dr. Sprague (an- 
other of appellant's witnesses) that this patient's trou- 



36 United States of America 

ble is imaginary (Tr. 193-194). If it is true that plain- 
tiff had trouble in working in dust or a closed room, 
it possibly would make a difference with my opinion. 
If it were true he was in the poison gas area on Octo- 
ber 12, 1918, without a mask and immediately there- 
after had pain in his eyes, with watering, water run- 
ning from the nose and sneezing attacks of pain in the 
stomach followed by vomiting followed by diarrhea 
which resulted in bronchial pneumonia by October 25, 
my opinions as to this man's condition would not be 
changed as far as my physical examination is con- 
cerned. If I assume those facts, I will have to qualify 
my answer. I will first say 'y^s' and qualify by stat- 
ing in the first place, I can't prove the history as 
given of a man carrying a mask and having the mask 
torn off and taking three minutes to put it back, and 
if you ask for an opinion I would have to qualify on 
that. It wouldn't change my opinion (Tr. 194). I am 
basing my opinion on my findings. Gas poison does 
destroy tissues and there are scars and we have other 
findings (Tr. 194). Pneumonia is not necessarily a re- 
sult of gas poisoning. It might and it might not, de- 
pending on the individual's condition, result in a weak- 
ened bronchial system (Tr. 194 and 195). From my 
observations I have seen no bad effect from so-called 
gas poisoning unless a man dies within a short period 
of time after exposure. That is all I can say" (Tr. 195). 

(d) Opinion Evidence of Physicians. Dr. P. J. Ger- 
mon, appellant's witness, "I don't think it would be 
injurious to this man's health to follow the occupation 
of farmer, based upon my examination and observation 



vs. Park Lusk 37 

and what I have heard in this case." (Italics ours.) 
(Tr. 189.) 
Dr. G. E. Riggs, another one of appellant's witnesses: 

"Q. From the examination which you made of 
him personally, after first having heard what his 
complaints were, and from the examination which 
you made of the X-ray pictures taken of him, did 
you find that the plaintiff in this case was suffering 
from any impairment of mind or body which, in 
your judgment, would render it impossible for him 
to follow with any degree of regularity any sub- 
stantially gainful occupation without injury to his 
health? 

"A. I did not." (Tr. 178.) 

Dr. Charles H. Sprague, another one of the appel- 
lant's witnesses: 

*'Q. Doctor, having in mind your examination 
of Park Lusk on October 23, 1922, and taking 
into consideration your medical education and ex- 
perience and bearing in mind that total disability 
is defined as a disability which renders it impos- 
sible for the person suffering from it to follow 
continuously any substantially gainful occupation, 
and that the word 'continuously' as used in this 
definition has been defined by the Courts as mean- 
ing the ability to work with reasonable regular- 
ity, and that such total disability is deemed per- 
manent when it is founded on conditions which 
make it reasonably certain that said disability will 
continue throughout the lifetime of the person 
disabled: 



38 United States of America 

"Do you have an opinion as to whether or not 
Park Lusk was totally and permanently disabled 
on the date of your examination, October 23, 1922? 

"A. I do have. 

'*Q. What is that opinion. Doctor? 

"A. That he was not" (Tr. 172-3). 

The same definition for total and permanent dis- 
ability was given to, and the same opinion sought 
based upon examinations, findings, diagnoses, and his- 
tory of the case as presented by evidence in the course 
of the trial to the two physicians, Dr. Kackley and 
Dr. Groom, appearing on behalf of appellee, and they 
each expressed the opposite opinion. 

Dr. Kackley stated that appellee was, in his opinion, 
totally and permanently disabled from the time he 
received the poison gas, and that he has been so totally 
and permanently disabled from that time to the pres- 
ent, and that that condition would remain throughout 
the remainder of his life (Tr. 136). 

The other doctor. Dr. C. P. Groom, gave it as his 
opinion that appellee was totally and permanently dis- 
abled from a time preceding May 8, 1919, to the 
present time, and that it is his best judgment it will 
continue, and that appellee will remain totally and 
permanently disabled throughout the remainder of his 
life (Tr. 156). 

WORK AND EMPLOYMENT RECORD 

(a) During Military Service. Plaintiff went over the 
top on September 26, 1918 (Tr. 74) and about the 
10th of October ran into the gas shell (Tr. 76). Plain- 



vs. Park Lusk 39 

tiff inhaled the gas and was burned by the gas, became 
unconscious (Tr. 76), and while the Captain wanted 
him to go to the hospital, appellee did not wish to 
go, as he thought it would wear off; this continued 
until he got so weak he couldn't go on (Tr. 77). He 
rode a horse along with the company a couple of hours, 
then transferred to machine gun cart, then to an ambu- 
lance, and to a field hospital ; there about a week, then 
to the Base Hospital, where he remained nine weeks, 
leaving the Base Hospital December 18, 1918 (Tr. 77). 
He secured leave from the hospital and permission to 
go back to his company and go home (Tr. 78). This 
continued until the middle of March, 1919; appellee 
did not perform the duties of sergeant during that 
time nor do any work, or exercise, or drill, or anything 
of that nature. Finally marched with the boys to the 
coast, making six or seven miles a day. Then crossed 
to the United States, during all of that time he went 
to the company infirmary on what they call ''sick 
call." Then to Camp Russell, Wyoming, where he was 
mustered out (Tr. 79). 

(b) Efforts to Work and Effect It Had Upon His 
Physical Condition. He then came to Pocatello, Idaho, 
arriving at his home the next day after he was dis- 
charged, going to his parents' ranch in Arbon Valley, 
which he and his brother owned in equal or half and 
half shares. The ranch contained 320 acres (Tr. 79). 
They continued in that joint ownership until 1926 
(Tr. 80). 

The first twelve months after he came home, the 
appellee put very little time in actual work (Tr. 81). 



40 United States of America 

The first four or five weeks he did nothing, he was in 
a weakened condition; there was work he should have 
done and tried to do it, but he couldn't stay with it 
(Tr. 81). He tried to milk cows, some mornings he 
could complete the job and some mornings he couldn't. 
He would have severe vomiting spells and pain in the 
stomach, and would have to quit. He tried to help 
with the haying, running the mower, didn't continue 
with that because he would get those gas pains in his 
stomach and start vomiting, and he would be so weak 
he couldn't sit on the mower; he would have pains in 
his head, his eyes hurt him. That first year he never 
worked a full day on the haying job (Tr. 82). He then 
tried to plow off and on through the season; the dust 
would get in his throat and lungs, choke him up; he 
would take those vomiting spells and coughing, some- 
times he would sit down until those things cleared up 
and would try to work again after resting twenty min- 
utes to half an hour. Never did work at that two days 
straight because of these conditions. He would quit 
and not work at all because he was so weak he couldn't 
work, and there were times in the mornings when he 
couldn't go out (Tr. 82). 

The first fall after he came back he tried to handle 
sacks on the combine; this work continued about 
twenty days, but he did not work every day, putting 
in only about four or five, or maybe six days, during 
that time, and quit because he got so sick and choked 
up so bad he couldn't work (Tr. 83). 

That first fall going after wood in the canyon he 
rode the horse and snaked the wood out to the wagon, 
working a little better than half a day out of the four 



vs. Park Lusk 41 

days. He tried to help chop, but didn't have the wind 
to use an axe. He helped load the wood and it would 
gripe his stomach every time he would get hold of a 
stick, and there would be pains in his stomach and 
chest (Tr. 83-4). 

He did some drilling, four or five days, because of 
the dust he choked up, got pains in his chest and 
eyes would pain and burn. In order to enable him to 
do any work at all in the drilling, the ordinary grain 
sacks were split in half because it hurt him to lift a 
full sack, and he vomited if he strained any (Tr. 84). 
He has never handled a full sack since the war (Tr. 
84). On the drilling job, which required about fifteen 
or sixteen days to do the drilling, but appellee put in 
only about five or six days. The chores and the chop- 
ping of the wood, his brother did all of that and he 
did not help because it hurt him to swing an axe. 
There was no other work undertaken the first year. 

The general routine on these ranches was about as 
follows: 

Spring work started the fore part of April. 

Then fix fences. 

Then do the ditching. 

Then start summer fallowing. 

Then harrowing. 

Some years you have to weed the land. 

Then comes hay and harvesting. 

Then drilling and canyon work. (Tr. 84-5.) 

"The operations were the same on both places, 
both dry farms, the operations were similar each 
year" (Tr. 68-9). 



42 United States of America 

On the first ranch there were thirty-five or forty 
acres of hay land under irrigation and the balance was 
grazing and dry farming, some waste (Tr. 85). In the 
spring I would do some fence work, I would not do as 
much work as he (my brother) because I felt weak 
most of the time. His brother dug the fence post holes 
and set the posts and appellee carried the hammer and 
staples and tacked the wire. That would take about 
a day. 

As to the plowing, they used to divide that up as 
nearly as they could. Appellee would not continue 
throughout the season because he would get choked 
up with the dust and pains in his chest, and his eyes 
would water so he couldn't see. He would quit for a 
day or two, and he would put his boy on the plow or 
hire a man. 

We used a team and scraper to clean the ditch. 
Appellee usually drove the team and he hired a man 
or (who) did the scraper work. That averaged about 
two days (Tr. 85). 

Appellee never did any harrowing because of the 
dust (Tr. 85). He ran the weeder and did not com- 
plete the job because the dust was so bad, and his 
brother usually would complete it. 

On the combine work appellee drove the horses and 
his brother sewed the sacks (Tr. 85). In 1921 appellee 
stayed with it (combine work) better, but not every 
day, because with a tail wind the dust would choke 
him and he had to quit (Tr. 86). In connection with 
the drilling in 1920 and in succeeding years, he would 
help a little, but not one day after another (Tr. 86). 



vs. Park Lusk 43 

The work as just explained for 1919 and 1920 has 
been about the same throughout the years (Tr. 86). 

The ranch thus far referred to consisted of 350 acres 
in which he and his brother David were equal partners. 
It was acquired in about 1913, and during the war the 
brother operated it and applied payments to their 
father and mother, from whom they had purchased 
it, and when the war ended there was only a balance 
of approximately $500.00 indebtedness (Tr. 58). 

He next contracted to purchase an 80-acre piece of 
ground to which he never acquired title, and on which 
there was twenty acres in crop and twenty acres in 
summer fallow. This was operated about the same as 
the other ranch, and he attempted the various tasks. 
After he left his brother's place he tried to do some 
plowing and did not continue, the results being the 
same as on other occasions. Sometimes he would take 
coughing spells, and start vomiting, and other days 
(Tr. 86) the wind would be so it would sweep the dust 
on him and he would choke up. The boy and girl 
(Tr. 87), the boy being twelve and the girl thirteen 
years of age (Tr. 86), would do some of the work, the 
boy driving the horses and the girl handling the levers 
on the plow (Tr. 87). The total time required for the 
plowing was fourteen or fifteen days, and the children 
did the plowing four or five days of that time (Tr. 87). 
This boy did the harrowing, appellee trying it a few 
times, but the dust would choke him up. He would go 
a half day before he would get choked up and have to 
quit (Tr. 87). Appellee had some one to sew the sacks 
and he would drive during harvesting. It always hurt 
him to lift sacks, causing pains in his stomach. Lots 



44 United States of America 

of times he would get dizzy and everything would go 
black and he would keel over. He would get these 
spells every time he exerted himself, and sometimes 
they would come on when just sitting round (Tr. 87). 

These conditions heretofore referred to in connection 
with the efforts to work were about the same every 
year. But some years there wasn't so much dust and 
he could work more (Tr. 88). 

He also did some road work under his brother for 
eight or nine years, averaging five or six days a year. 
He would not work steady one day after another (Tr. 
88). There would be mornings when he would take 
to vomiting and he was too sick to go to work. He 
would take the team down and there was most always 
a man around he could hire to drive the team for him. 
Other times his boy would come down after school and 
drive until quitting time, that would happen almost 
every day. Whenever he hired a man for that work 
he would go home. He felt weak, would have griping 
in his stomach, and pains in his chest and lungs. This 
so-called road work was the only outside work he did 
(outside of his farm). 

The foregoing statements were corroborated by many 
witnesses. We have called attention to much of it, and 
shall not here repeat that testimony. 

(c) Assistance in His Work by Others. We have al- 
ready called attention under the immediately preced- 
ing subdivision to the brother, hired man, wife and 
children, and others going out to relieve him at his 
work, by reason of his weakened condition brought 
about through coughing and vomiting, pains in his 



vs. Park Lusk 45 

chest and stomach, and the trouble with his eyes, but 
we would at this time call attention to a few illustra- 
tive facts. 

While this man lived on a farm ever since he came 
back from military service, he did not do the work, 
that being done by his wife, their children, hired man, 
his brother, and others. As for instance, there was the 
plowing: He did it part of the time. The rest of the 
time his oldest boy and my oldest girl of thirteen— 
the boy managed the horses and the girl managed the 
levers of the plow (Tr. 68). The boys always did the 
harrowing (Tr. 68). I (Mrs. Lusk) helped him with 
the seeding. I helped him fan the seed and helped him 
treat it, when I was doing that he was generally out 
helping a little (Tr. 68). There was no hay. There 
was some fencing, but not a lot. That was a 160-acre 
place with 140 acres seeded (Tr. 68). As to gathering 
sacks set out in the fields after harvesting, the ones 
we hired to haul the feed out, they picked up the sacks 
and took them away. Sometimes Park Lusk super- 
vised it (Tr. 6S). Appellee never went for wood alone, 
sometimes the neighbors would go and sometimes I 
would go, and sometimes the boys went. When I went 
I helped gather up the wood, which is small wood. We 
both put it on the wagon, if he exerted himself he 
would start to cough and then he would start to vomit 
(Tr. 68). Mr. Lewis helped him on the combine this 
year and the boys and I (Mrs. Lusk) finished. I sewed 
the sacks." She put the sacks on the bagger and when 
it was full of wheat she sewed it and dumped it in the 
field (Tr. 69). 

During haying on the ranch with his brother he tried 



46 United States of America 

to help in the mowing, but he couldn't continue, he 
hired a man to help him out (Tr. 82). In cleaning the 
ditches appellee drove the team and hired a man who 
did the scraper work (Tr. 85). When he ran the weeder 
he did not complete the job and his brother would 
usually complete it (Tr. 85). The little boy and girl 
would relieve him and do the work in connection with 
the plowing (Tr. 87). In the gravel work, averaging 
only five or six days a year, but out of that time he 
would lose time and hire a man to take his team, or 
his boys would come down after school and part of the 
time on Saturdays to relieve him (Tr. 89). 

Throughout the years of this farm operation no task 
from milking cows, gathering drift wood, to the plow- 
ing, harrowing, fencing, harvesting, but what this man 
made an effort to perform the work, but never complet- 
ing it, and even such work as might be attempted one 
day after another for a week or two would be inter- 
rupted by dizzy spells, fainting, and coughing and 
vomiting spells, so that the machinery and equipment 
would be required to stand still on many occasions 
fifteen, twenty, or thirty minutes until appellee could 
recover sufficiently to continue. 

THE ISSUE 

The Appellant's Assignments of Error, Nos. I to XI, 
would seem to be an indication of the following issues: 

(a) The Court erred in overruling appellant's de- 
murrer to the complaint — no authorities are cited on 
this, and no argument is presented in the brief. 

Appellant's Assignment of Errors Nos. II, VIII, IX, 



vs. Park Lusk 47 

and X are, of course, directed to the insufficiency of 
evidence. 

Appellant's Assignments of Error Nos. Ill, IV, V, 
VI, and VII refer to alleged errors in the admission of 
testimony, and thus for our convenience we would re- 
state the issues as we intend to discuss them: 

Was There Sufficient Substantial Evidence to Require the 
Case to Go to the Jury and to Sustain the Verdict, 

and 

Did the Trial Court Err in Its Ruling on the Demurrer 
or Its Rulings as to the Admission of Testimony? 

REVIEW OF CASES CITED IN APPELLANT'S 

BRIEF 

I 

Apprllant in its brief under Points and Authorities, 
I to VIII, both inclusive, cites certain authorities which 
we shall now briefly discuss. 

Under the burden of proof (1) Existence of total dis- 
ability during the effective dates of the policy, and 
(2) That such disability was then, ever since has been, 
and probably will continue to be permanent, they cite 
first the case of: 

U.S. vs. Kerr (CCA. 9), 61 Fed. (2d) 800. 

This case was decided by this Court November 14, 
1932, and the Court is familiar with the facts, but we 
call attention to the fact that the injury here was a 
lame knee and that he could not work without limp- 
ing. He would use a cane off and on; and the doctor's 



48 United States of America 

opinion was based upon a question which did not 
detail a continued condition, nor was it predicated 
upon evidence in the case, and assumed a condition 
which was not shown. The Court, among other things, 
said: 

''The Court may undoubtedly judicially know 
that a man with a locked knee joint is not totally 
disabled, and, because the knee is stiff or the car- 
tilage is misplaced, does not establish total and 
permanent disability." 

In addition, the doctor testifying for the plaintiff in 
that case attributed his ailments at the time of the 
examination, which was more than eleven years after 
the discharge, to sciatica. And this Court further said : 

"This case clearly appears to be within United 
States vs. Fly, 58 Fed. (2d) 217, in that the plain- 
tiff admitted that he worked continuously for 26 
months, 'punched the clock' every hour in 'nine 
or ten stations,' was 'given twenty minutes to 
make the rounds,' but the 'stations were close to- 
gether,' one in the basement, the others on the 
main floor and upstairs, 'I had to climb up and 
down stairs'. 

"The insurance is not against a lame knee or 
a knee that 'bothers' or against limping, or the 
use of a cane, but is against total and permanent 
disability from following continuously a substan- 
tially gainful occupation at the time of discharge, 
and reasonably certain to continue during his life- 
time." 



vs. Park Lusk 49 

With that record and with no evidence as to either 
a total or permanent disability, based upon the facts 
in evidence even tending to show that by reason of 
the disability upon which the claim was presented, the 
plaintiff was totally and permanently disabled, cer- 
tainly it is not in support of any contention in opposi- 
tion to the claim at issue here. 

We, of course, agree with the principles presented in 
this Point I, but we see no application of the facts in 
the Kerr case. 

U.S. vs. Rentfrow (CCA. 10), 60 Fed. (2d) 488, is 
another case cited by appellant in support of their 
Point I. It was a case involving tuberculosis, and the 
Court found : 

"The proof in this case is that his disability in 
1919 was not permanent * * * the only direct 
evidence on the subject is that of Dr. Calhoun, 
who testified in 1922 that his condition was not 
a permanent one and that the disease would pos- 
sibly have been arrested if the insured had fol- 
lowed the treatment suggested." 
> 
Like so many of the other cases which have been 
before the Courts, the plaintiff in this case, of course, 
did not assume his responsibility and burden; he pre- 
sented no evidence as to permanency. 

The next case cited is that of U.S. vs. Diehl (CCA. 
4), 62 Fed. (2d) 343. This was another tubercular case 
and the Court, among other things, said: 

**0f course the subsequent history of the insured 
must be considered for the purpose of determining 



50 United States of America 

whether a disabiUty deemed only partial and tem- 
porary at the time of the lapse of the policy was 
in effect total and permanent. * * * The total 
disability based upon conditions which at the 
time of the lapse do not render it reasonably cer- 
tain that such total disability will continue through 
life is not to be deemed permanent, even though 
a subsequent change of conditions may render 
such a disability permanent in character." 

Of course if the disability is one such as tuberculosis, 
which in the early stages permits of treatment and 
care such as to bring about an arrested condition, the 
neglect and careless indifference of the sufferer does 
not sustain the burden assumed as to proof of total 
and permanent disability merely because that lack of 
care and attention ultimately results in a stage of 
tuberculosis which becomes and is active and incurable. 

The difference, of course, is that in the case of a 
bronchitis resulting from an inhalation of gas it is not 
curable, at least no medical authority thus far has 
ventured to make that assertion, and the record in this 
case negatives that, as a fact. • 

II 

As to their Point II the cause of disability or ail- 
ment must be one of which it is possible to say with 
reasonable certainty that it was incurable at the time 
of the lapse of the policy, or with equal certainty that 
it must lead to another and incurable ailment, and in 
support of that they cite first the case of U.S. vs. Clapp 
(CCA. 2), 63 Fed. (2d) 793, 795. The Court there 
said: 



vs. Park Lusk 51 

"The proper testimony we think is this: The 
insured can recover only by showing that at the 
lapse he was suffering from some ailment of which 
it is possible to say with reasonable certainty that 
it was incurable at that time, or with equal cer- 
tainty that it must lead to another and incurable 
ailment." 

In that case the Court held that the evidence was 
sufficient to prove total disability at the time the in- 
surance policy expired and the Court said : 

"Did the case stop there we would not interfere. 
However, the policy is to pay him only if the dis- 
ability is permanent at the lapse." 

The first physician who treated him shortly after his 
return home did not diagnose his case as "duodenal 
ulcer," nor did he even intimate at the trial that for 
the three years while he treated him he was so afflict- 
ed. He did not then or later say what was the cause 
of his illness; he did not venture to predict with rea- 
sonable certainty or even as a guess how long the malady 
would last. 

The next doctor believed he had already developed 
an ulcer when he first treated him in May or June, 
1922. He would not say how long he had then had it 
or more than that it did not develop quickly. 

A third doctor observed him shortly before the trial 
who said he was suffering from duodenal ulcer, which 
might have existed in May, 1919, but who would not 
commit himself further, and thus the Court in that 
case said : 



52 United States of America 

'The only proof of permanency was that the 
plaintiff had been continuously disabled and that 
three years afterwards he had developed a duodenal 
ulcer." 

U.S. vs. Wilfore (CCA. 2), 66 Fed. (2d) 255, is the 
next case discussed. Here again we have the lack of 
evidence as to a permanent condition. The doctor 
who testified for the plaintiff in that case stated that 
there is no cure for chronic nephritis, but there is no 
evidence that nephritis rendered it impossible for the 
plaintiff to follow a gainful occupation, and it appeared 
from the medical testimony and even from the plain- 
tiff's own testimony that the sacro-iliac condition and 
not the nephritis was responsible for plaintiff's inabil- 
ity to labor continuously. Dr. Harkness, another wit- 
ness called by the plaintiff, testified that 50 per cent 
of sacro-iliac cases recover. 

Dr. Robert L. Maynard, called by the defendant, 
stated that sacro-iliac conditions are thought to be 
curable in the great majority of cases. Thus there was 
no evidence in that case, even from the plaintiff's own 
testimony, that from the chronic nephritis and its 
result upon the human body he was not able to con- 
tinue to function or to follow a gainful occupation, 
whereas the other disability, that of the sacro-iliac con- 
dition, was curable and not a permanent condition. It 
is well to note here, in view of some other phases of 
the case at issue, that the Court in the Wilfore case, 
supra, said: 

"The existence of an incurable condition in 1919 
was a strictly medical question which the jury 
could not determine of its own behalf." 



vs. Park Lusk 53 

And the Court said in support of its position in the 
case of U.S. vs. Clapp, from the same circuit and here- 
tofore referred to and emphasized the importance of 
medical testimony in relation to questions of strictly 
medical nature, and it is very evident reversed the case 
purely on the ground that while the plaintiff had pre- 
sented medical testimony, his medical witnesses failed 
to say that the condition causing the disability was 
permanent and incurable. 

Ill 

In connection with appellant's Point III they say, 
'The question of fact, whether the known symptoms 
at the time the policy lapsed disclosed permanent dis- 
ability, must be answered by expert medical testimony 
and not left to the unguided intuitions of the jury," and 
in support of that they cite U.S. vs. Clapp (CCA. 2), 
63 Fed. (2d) 793, 795. 

This claimant was suffering from duodenal ulcer at 
the time of the trial and no doctor said that he was 
so suffering in May, 1919. The Court, commenting 
upon this, said: 

"No doctor was found hardy enough to say that 
the indigestion, accompanied by ulcer, was rea- 
sonably certain to continue for life. Should one 
appear we must await his testimony before pass- 
ing upon it. The existence of duodenal ulcer in 
May, 1919, was not for a jury to determine upon 
its own unguided intuitions. It was a strictly 
medical question. Without the help of those 
skilled in science, the conclusions of laymen upon 



54 United States of America 

such an issue were without an adequate basis and 
necessarily merely speculation. Only those famil- 
iar with the origin and course of the malady were 
competent to testify and without testimony a ver- 
dict stood unsupported." 

We elsewhere in this brief cite several other authori- 
ties along the same line, of the necessity of expert 
medical testimony, and of course we agree with this 
pronouncement from the Circuit Court of Appeals for 
the Second Circuit. That doctrine has been enunciated 
by various Courts and by the Supreme Court of the 
United States in the case which is so often cited for 
various propositions, to-wit: U.S. vs. Lumbra, which 
we shall refer to in another portion of this brief. 

In this connection and at this point, in discussing 
this citation of the appellant, may we here add that 
in the instant case the definition of what constitutes 
total and permanent disability was agreed upon and 
the Treasury Department regulation as enunciated on 
March 9, 1918, was stipulated into the record as the 
rule and regulation governing this question, being plain- 
tiff's exhibit No. 1 (Tr. 36), and there was only the 
general objection to the hypothetical question as to its 
not giving a fair and substantial statement of the facts 
and that it invades the province of the jury, and we 
shall elsewhere discuss these two propositions, but cer- 
tainly the evidence in this case shows the inhaling of 
gas, resultant pneumonia and bronchial symptoms long 
before the lapse of the insurance policy and shows a 
continuation of that disability and no other from the 
date of his being gassed in France on or about Octo- 
ber 10, 1918. 



vs. Park Lusk 55 

IV 

To their Point IV that a case should never be sub- 
mitted on probabihties, ''A mere scintilla of evidence 
is not sufficient to warrant the submission of issues of 
fact to a jury," of course we agree; but in support of 
that appellant cites U.S. vs. Lawson (CCA. 9), 50 
Fed. (2d) 646, that being a case from this circuit, we 
shall not review it at length but call attention to the 
fact that this Court affirmed the jury's verdict and 
the Trial Court's judgment and the Court there said, 
as we contend here: 

"That if the jury beUeved the evidence sub- 
mitted by the plaintiff was sufficient to justify 
the verdict, the Appellate Court should not dis- 
turb it." 

In that case we had one of the longest work records 
of any case brought before an Appellate Court for re- 
view, and in passing we might say that it was cited 
by the Supreme Court of the United States in the 
Lumbra case in support of its decision there, but the 
testimony of Dr. Newton was that from his examina- 
tion he would say that the plaintiff Lawson had been 
suffering from the disability claimed for a compara- 
tively long time; that the recognized treatment for the 
disease is rest and hygienic measures, proper dieting, 
and that there was no known cure for the trouble, and 
then answering the hypothetical question which gave 
him a review of all of the history of the man's case, 
this doctor gave it as his opinion that Lawson was 
totally disabled October 20, 1919, and that it was a 
permanent disability at that time. 



56 United States of America 

The next case cited is that of Nichols vs. U.S. (C.C. 
A. 9), 68 Fed. (2d) 596. There a judgment was entered 
for the defendant and the plaintiff, Nichols, appealed, 
and this Court affirmed the judgment of the Trial Court 
and the Court, referring to the expert witnesses who 
offered testimony on behalf of the plaintiff, commented 
upon one of them as one who presented X-rays of his 
head and pointed out their significance to the jury and 
testified as to the condition of the injured. Another 
expert was a general practitioner who had been Nich- 
oFs physician since 1926. He testified that plaintiff's 
chief complaint was persistent headaches, but he was 
not able to arrive at any definite cause for the head- 
aches and that in the business the plaintiff was then 
engaged in, he was unable to work continuously at 
that occupation because of the headaches. 

The other expert witness was an eye, ear, nose and 
throat specialist who made an examination two days 
before the trial. The one doctor who testified in 
answer to the hypothetical question that he thought 
plaintiff was totally and permanently disabled at the 
time of his discharge did not base it upon his head- 
aches alone, but also included the fact that plaintiff 
complained of blurred vision and that his eye tired 
when he had used his eyes for any length of time. 
And there we have that comment which has been so 
frequently made use of in the decisions, 

"but in view of the work record, it can not be said 
that he is totally and permanently disabled ac- 
cording to the interpretation of the statute as 
applied by the Courts. He may have worked 



vs. Park Lush 57 

under difficulties, but there is no evidence show- 
ing that he was unable to do what he did do." 

V 

In support of appellant's Point V that a verdict 
should be directed if the state of the evidence is such 
that a verdict, if returned for one party, would have 
to be set aside upon motion of the other party and 
before discussing the cases cited under this, let us 
make the observation here that that, of course, is the 
rule, and the further observation that in this case 
appellant did exactly that — it moved to set aside the 
verdict — and the Trial Court, after hearing arguments 
and having all the other matters of law that are here 
propounded presented to it, and after carefully weigh- 
ing the evidence, decided, as did the jury, that the 
plaintiff was entitled to the judgment, and refused to 
set aside the verdict. 

Now as to the cases cited, the first one is that of 
Merchants Bank vs. State Bank, 10 Wall. (U.S.) 604, 
637: 

In this case the majority opinion reversed the opin- 
ion of the Trial Court who had granted the motion of 
defendant's counsel for an instructed verdict, thus 
holding that the Trial Court erred in granting defend- 
ant's motion. We consider this case as in support of 
the Trial Court's judgment in the case at issue here 
rather than adverse to it. 

The next case was that of Improvement Company 
srs. Munson, 14 Wall (U.S.) 442: 

While there was a directed verdict which was ap- 
proved by the Circuit Court, it was because of the 



58 United States of America 

fact that there was no evidence whatever in support 
of the defense, and in the absence of evidence, of 
course it is proper to direct in favor of the party that 
had made a prima facie case. 

The last case cited is Bowditch vs. Boston, 101 U.S. 
16, 18, and when that case was decided way back in 
1880 the Courts had the same view of this rule that 
is now enunciated and properly applied, and the Court 
said there: 

**It is now a settled rule in the Courts of the 
United States that whenever in the trial of a civil 
case it is clear that the state of the evidence is 
such as not to warrant a verdict for a party and 
that if such a verdict were returned the other 
party would be entitled to a new trial, it is the 
right and duty of the judge to direct the jury to 
find according to the views of the Court." 

It is merely the statement of a rule or principle to 
be appHed, but again we wish to call attention to the 
fact that the learned Trial Judge not only disagreed 
with counsel for appellant in connection with the mo- 
tion for a directed verdict, but later, several months 
after the trial, was called upon to pass upon appellant's 
motion to set aside the verdict and grant a new trial, 
and there again he decided adversely to appellant's 
contention. 

VI 
In support of appellant's Point VI, "Upon motion 
for a new trial the Court must weigh the evidence," 
we agree this is a correct statement of the law; but let 
us for a moment review the authorities cited under it: 



vs. Park Lusk 59 

Forty-six C.J., 401, 402, note 75: This, of course, 
refers to the note's apphcabihty to Sec. 455, deahng 
with the question of evidence at the trial, and the text 
writer in that section states : 

''Where the point is properly raised and pre- 
sented by a motion for a new trial, it is the duty 
of the Trial Judge to consider and determine 
whether the verdict is contrary to the evidence 
or the weight thereof is excessive in amount or 
is without evidence to support it. In performing 
this duty the Trial Judge must weigh the evi- 
dence." 

Appellant makes no contention that the Court abused 
his discretionary power or that he failed to weigh the 
evidence. The only complaint made is that when this 
motion was presented to the Court, after weighing the 
evidence, the Court did not agree with the appellant, 
and by referring to note 75, page 402, supra, we find, 
of course, the support for the rule; but it is interesting 
to note that in the case of Phileas et al. vs. Missouri 
Pac. Railway Company, 125 S.W. 553, one of the 
cases cited there, the reviewing Court went further 
than this, and after announcing the well known doc- 
trine of the Trial Court's duty, said : 

"It is not our (the Appellate Court) duty to 
pass upon the weight of the testimony but to 
determine its legal effect." 

The next case cited, that of Meldrum vs. Curtis & 
Bro., 29 Fed. (2d) 582, announces merely the general 



60 United States of America 

rule that the Trial Court in passing upon a motion 
must weigh the evidence. 

The next case is that of Lake Erie & W. R. Co. vs. 
Schneider (CCA. 6), 257 Fed. 675, and that simply 
makes the distinction that in passing upon a motion 
to direct a verdict, the Trial Court should not weigh 
the evidence, while in giving consideration to a mo- 
tion for a new trial, he was required to weigh the 
evidence. This rule has, of course, been even further 
modified so that the Trial Judge in a sense must weigh 
the evidence when passing upon a motion for directed 
verdict, as it is now the rule that whenever he feels 
that ultimately he must grant a motion for a new 
trial in case the verdict is adverse to the party making 
the motion, that he should then grant the motion in 
the first instance. 

VII 

Under Point VII appellant states, "It is axiomatic 
that opinions of witnesses are in general irrelevant." 
This is another one of those general statements, and, 
of course, opinion evidence can not be taken only 
under exceptions to the general rule. 

Appellant cites Jones on Evidence, Third Edition, 
pages 541, 553. The writer of this brief does not have 
available the particular edition and asks leave to dis- 
cuss it in oral argument if it is made available to him 
previous to that time. 

However, we at this time discover the word ''opin- 
ion" as treated by Jones' Commentary on Evidence, 
Second Edition, Vol. 3, page 2280, Section 1241, and 
we have no reason to believe that this author will 



vs. Park Lusk 61 

have modified that seriously in the next edition, and 
we find the author here stating: 

"It is unquestionably the general rule that wit- 
nesses must testify to facts within their knowledge 
and may not state their opinion, but the word 
'opinion' is one which has a most elusive legal 
connotation. Notwithstanding the general rule, 
it is a well known fact that 'opinions' in the ordi- 
nary sense of the word are repeatedly received 
both from ordinary witnesses and from experts. 



Matters of neglect and of recklessness and of causa- 
tion are then treated by this volume, and in Section 
1246 it is stated: 

"Nevertheless the question is primarily one for 
the exercise of the sound discretion of the Trial 
Court. The exercise of such discretion may of 
course be reversed for abuse, but it is not likely 
to be overturned in the absence of showing of 
prejudicial error," 

and that is our contention, and we shall elsewhere in 
this brief cite many cases in support thereof. 

One of the principal exceptions to that general rule 
is stated in Section 1247 as follows: 

"(3) Witnesses shown to be learned, skilled or 
experienced in a particular art, science, trade or 
business may in a proper case give their opinions 
upon a given state of facts." 



62 United States of America 

Without going further into that general citation we 
would, however, add from Section 1344 as follows: 

"One of the most important fields for expert 
testimony and one of the most commonly recog- 
nized is the domain of medical science," 
and we would quote further from Section 1348: 

'The reason for the admission of expert opinion 
in such cases is that the determination of the cause 
of an injury often rests in the application of a 
knowledge of anatomy * * * not possessed by 
the average juryman." 

VIII 

Point VIII is, "All hypothetical questions should be 
so framed as not to call upon the witness to determine 
controverted questions of fact, or to pass upon the 
preponderance of the evidence," and with this rule we 
also agree. 

Appellant's first case cited under this point is Inland 
Etc. Coasting Co. vs. Tolson, 139 U.S. 551, 11 Sup. Ct. 
653; 35 L. Ed. 270. In that case the question involved 
was whether or not "the place where plaintiff stood at 
the time of the injury was reasonably safe," and the 
Court said that that is for the jury and depends on 
common knowledge and observation upon which opinion 
of witnesses are not admissible. (Italics ours.) 
< We see no application to the case at issue here or 
the questions of this man's physical condition and the 
effect upon his health, the nature of his disability or 
the cause of it, or the permanency or incurability are 
not matters of common knowledge but are matters 
which require the skill of the medical practitioners. 



vs. Park Lusk 63 

The next case cited is that of Pratt vs. North Ger- 
man Lloyd Steamship Company (CCA. 2), 184 Fed. 
303, 33 L.R.A. (N.S.) 532, and there, somewhat simi- 
lar to the case just discussed, we again had the ques- 
tion of whether ''the promenade deck was in such 
condition as caused the plaintiff to fall and sprain her 
ankle?" and the two questions objected to and dis- 
cussed by the Appellate Court were: 

"Q. The plaintiff must have fallen on purpose, 
didn't she? 

''Q. How do you account for her falling, then?" 

and the Court there said: 

"The first question is one calculated to ridicule 

the witness and it was quite within the discretion 

of the Trial Judge to exclude it. The second was 

improper as calling for the opinion of the witness 

upon the very question to be decided by the jury." 

We see no relevancy to the question at issue under 

Point VIII. There is no question of controverted facts 

or calling for the witness to pass upon the purpose of 

the evidence. This case might have relevancy to a 

point which is sometimes raised in these cases, that 

the hypothetical question invaded the province of the 

jury, but no authorities are cited to such a point in 

this case. 

The next case is that of Giraudi vs. Electric Imp. 
Company (CaL), 40 Pac. 108, 28 L.R.A. 596. This 
case, far from sustaining appellant's contention in Point 
VIII, does in fact support our contention that under 
certain conditions an expert may answer a question, 
the answer to which is similar or contrary to the 



64 United States of America 

answer which the jury must find, and secondly that if 
from other facts the jury might arrive at the same 
conclusion, then it is in any event harmless error to 
permit the answer to be given by the expert. In the 
case cited by appellant, just referred to, we have a case 
of neglect and the witness was asked whether or not 
the defendant was negligent. This was by the witness 
answered over the objection of the defendant, and the 
Court said : 

'*If negligence had been fully proved by other 
evidence, defendant was not injured by the form 
of the question." 

The Court further held : 

**I think we may safely conclude that the de- 
fendant was not injured by the form of the ques- 
tion." 

POINTS AND AUTHORITIES 

Proposition of Law No. 1 

A general objection without stating specifically the 
ground is insufficient to raise any proposition of law, 
and the objection that a hypothetical question contains 
incompetent and prejudicial evidence and is not a sub- 
stantial statement of the facts and/or is not a sub- 
stantial and fair statement of the facts, is not suffi- 
ciently definite. 

Noonan vs. Caledonia Min. Co., 121 U.S. 393, 

400; 30 L. Ed. 1061. 
Hart vs. U.S. (CCA. 9), 11 Fed. (2d) 499. 
Miller vs. U.S. (CCA. 9), 4 Fed. (2d) 384. 



vs. Park Lusk 65 

Arkansas Bridge Co. vs. Kelly-Atkinson Cons. 

Co. (CCA. 8), 282 Fed. 802, 804. 
Sullivan vs. U.S. (CCA. 9), 32 Fed. (2d) 992. 
Van Norden vs. Chas. R. McCormick Lumber 

Co. (CCA. 9), 17 Fed. (2d) 568. 
DeJohn vs. Alaska Matanuska Coal Co. (CC 

A. 9), 41 Fed. (2d) 612. 
U.S. vs. Smith (CCA. 9), 55 Fed. (2d) 141. 
Frates vs. Eastman (CCA. 10), 57 Fed. (2d) 

522. 
Frey & Sons vs. Cudahy Packing Co., 256 U.S. 

208, 211; 41 S. Ct. 451; 65 L. Ed. 892. 

"The rule that objections to evidence must or- 
dinarily be specific applies to any evidence of any 
nature, whether oral or documentary and it has 
been held that a general objection raises no ques- 
tion where the objection is not apparent on the 
face of the document. The rule also applies to 
expert and opinion evidence and to the form or 
substance of a hypothetical question to expert 
witnesses. A general objection is properly over- 
ruled if the evidence is not improper on its face 
but requires some fact to be brought to the notice 
of the Court to show its inadmissibility." 

64 C.J., Sec. 204, page 184. 

''Objections to hypothetical questions asked 
opinion witnesses must be specific. A general 
objection is insufficient to raise the point that the 
question is improper as omitting necessary facts 
or as assuming facts not in evidence; in such case 
the objection should point out what necessary facts 



66 United States of America 

were omitted or what facts were included that were 
not proved. An objection that a hypothetical 
question 'assumed a state of facts not in contro- 
versy, irrelevant, incompetent and no foundation 
laid' is insufficient to raise the point that it was 
not a proper hypothetical question/' 
64 C.J., page 197, Sec. 213. 

*'An objection to a hypothetical question is 
properly overruled where the only ground stated 
is that there was no evidence to support it and 
there is such evidence." 

64 C.J., page 198, Sec. 213. 

"A general objection to evidence, oral or docu- 
mentary, will not as a general rule avail if any 
part of the evidence objected to is admissible. In 
other words, an objection to evidence en block, 
without pointing out specifically that portion of 
the evidence which is claimed to be inadmissible, 
is properly overruled." 

64 C.J., page 198, Sec. 214. 

"A party objecting to a long hypothetical ques- 
tion involving, as such questions generally do, 
assumption of a large number of facts, has no 
right to conceal his real objection by the camou- 
flage that it is immaterial, irrelevant, and incom- 
petent and assumes facts not shown by the record. 
The Trial Court is entitled to know with some 
degree of precision the exact objection that is 
being urged against such a question, and opposing 
counsel are also entitled to know the real bases of 
the objection in order that the question may be 



vs. Park Lusk 67 

rectified, if possible, in respect to the matters 
complained of." 

Reynolds & Heitson vs. Henry, 185 N.W. 67, 
193 Iowa 164, 167. 

Proposition of Law No. 2 
On defendant's motion for directed verdict any con- 
flicts in testimony must be resolved in plaintiff's favor. 
Brownlee et ux vs. Mutual Benefit Health & 

Accident Association (CCA. 9), 29 Fed. (2d) 

71. 
Sorvik vs. U.S. (CCA. 9), 52 Fed. (2d) 403. 
Burke vs. U.S. (CCA. 9), 50 Fed. (2d) 653. 
Sekinoff vs. N. P. Severin Co. (CCA. 9), 53 

Fed. (2d) 753. 
Waddell vs. Guthrie, 45 Fed. 977. 
Gunning vs. Cooley, 281 U.S. 90; 50 S. Ct. 231; 

76 L. Ed. 720. 
Lumbra vs. U.S., 290 U.S. 551; 54 S. Ct. 272; 

78 L. Ed. 347. 
Nichol vs. U.S. (CCA. 9), 68 Fed. (2d) 597. 
U.S. vs. Alger (CCA. 9), 68 Fed. (2d) 592. 

Proposition of Law No. 3 

Whether the known symptoms at the time the policy 
lapsed disclosed permanent disability must be answered 
by expert medical testimony and not left to the un- 
guided intuitions of the jury. 

U.S. vs. Smith, 68 Fed. (2d) 38-39. 

U.S. vs. Clapp, 64 Fed. (2d) 793. 

U.S. vs. Monger, 70 Fed. (2d) 361. 

U.S. vs. Lumbra, 63 Fed. (2d) 796 (CCA. 2). 

U.S. vs. Wilfore, 66 Fed. (2d) 255 (CCA. 2). 



68 United States of America 

Proposition of Law No. 4 
There is evidence to support the verdict in this case. 

Maher vs. Chicago, M. & St. P. Ry. Co. (C.C. 

A. 1921), 278 Fed. 431. 
Waddell vs. Guthrie & Co., 45 Fed. (2d) 977. 
Bergert vs. Payne (CCA. Ohio, 1921), 274 Fed. 

784. 
Barksdale vs. U.S. (CCA. 10), 46 Fed. (2d) 762 

at 763-4. 
Melavski vs. U.S. (CCA. 7), 43 Fed. (2d) 974. 
Vance vs. U.S. (CCA. 7), 43 Fed. (2d) 975. 
U.S. vs. Lawson (CCA. 9), 50 Fed. (2d) 646. 
Carter vs. U.S. (CCA. 4), 49 Fed. (2d) 221-223. 
U.S. vs. PhiUips (CCA. 8), 44 Fed. (2d) 689 

at 691. 
U.S. vs. Tyrakowski (CCA. 7), 50 Fed. (2d) 

766. 
Fladeland vs. U.S. (CCA. 9), 53 Fed. (2d) 17. 
Ford vs. U.S. (CCA. 1), 44 Fed. (2d) 754-755. 
U.S. vs. Godfrey (CCA. 1), 47 Fed. (2d) 126. 
La Marche vs. U.S. (CCA. 9), 28 Fed. (2d) 828. 
Nicolay vs. U.S. (CCA. 10), 51 Fed. (2d) 170 

and many cases there cited. 
U.S. vs. Rasar (CCA. 9), 45 Fed. (2d) 545 at 

547. 
Wise vs. U.S. (CCA. 5), 63 Fed. (2d) 307. 
Patton vs. Texas & P. R. Co., 179 U.S. 659; 45 

L. Ed. 361. 
U.S. vs. Ranes, 48 Fed. (2d) 582 (CCA. 9). 
U.S. vs. Alger, 68 Fed. (2d) 592 (CCA. 9). 
U.S. vs. Dudley, 64 Fed. (2d) 743 (CCA. 9). 



vs. Park Lusk 69 

U.S. vs. Jensen, 66 Fed. (2d) 19 (CCA. 9). 
U.S. vs. Suomy, 70 Fed. (2d) 542 (CCA. 9). 
U.S. vs. Baxter, 62 Fed. (2d) 182 (CCA. 9). 
U.S. vs. Burleyson, 64 Fed. (2d) 868 (CCA. 9). 
U.S. vs. Francis, 64 Fed. (2d) 865 (CCA. 9). 
Storey vs. United States, 60 Fed. (2d) 484 (C 

CA. 10). 
United States vs. Sorrow, 67 Fed. (2d) 372 (C 

CA. 5). 

Proposition of Law No. 5 

The evidence is to be viewed in the Hght most favor- 
able to appellee. 

U.S. vs. Albano, 63 Fed. (2d) 677 (CCA. 9). 

U.S. vs. Dudley, 64 Fed. (2d) 743 (CCA. 9). 

U.S. vs. Lesher, 59 Fed. (2d) 53 (CCA. 9). 

Sorvik vs. U.S., 52 Fed. (2d) 406 (CCA. 9). 

U.S. vs. Burke, 50 Fed. (2d) 653 (CCA. 9). 

Alaska Fish Salting & By-Products Co. vs. Mc- 
Millan, 266 Fed. 26. 

U.S. vs. Griswold, 61 Fed. (2d) 583 (CCA. 9). 

U.S. vs. Lawson, 50 Fed. (2d) 646 (CCA. 9). 

U.S. vs. Meserve, 44 Fed. (2d) 549 (CCA. 9). 

U.S. vs. Scarborough, 57 Fed. (2d) 137 (CCA. 
9). 

U.S. vs. Rasar, 45 Fed. (2d) 545 (CCA. 9). 

U.S. vs. Riley, 48 Fed. (2d) 203 (CCA. 9). 

Great Northern Ry. Co. vs. Shellenbarger, 54 
Fed. (2d) 606 (CCA. 9). 

Gunning vs. Cooley, 281 U.S. 90; 50 S. Ct. 231; 
74 L. Ed. 720. 



70 United States of America 

Lumbra vs. U.S., 290 U.S. 551; 54 S. Ct. 272; 

78 L. Ed. 347. 
Nichol vs. U.S. (CCA. 9), 68 Fed. (2d) 597. 
U.S. vs. Alger (CCA. 9), 68 Fed. (2d) 592. 
U.S. vs. Fry (CCA. 4), 71 Fed. (2d) 423. 

Proposition of Law No. 6 

Prejudicial error can not be predicated on evidence 
that is not objected to nor can any ground for reversal 
be urged which is not stated in the objection. 

(a) An objection made after a question is answered 
is too late. 

Penix vs. Sloan, 3 Fed. (2d) 258 (CCA. 5). 
Dinet vs. Rapid City, 222 Fed. 497 (CCA. 8), 

26 R.C.L. 1046. 
Alabama Fuel & Iron Co. vs. Minyard, 88 So. 

145; 205 Ala. 140. 
Parks vs. City of Des Moines, 191 N.W. 728; 

195 Iowa 972. 
Bergholtz vs. Oregon City, 240 Pac. 225; 116 

Ore. 18. 
Seerie vs. Brewer, 40 Colo. 299; 90 Pac. 508; 122 

Am. St. Rep. 1065. 

(b) Where testimony is admitted without objection, 
prejudicial error can not be assigned thereon. 

Lederer vs. Real Estate, Etc., 273 Fed. 933 (C 

CA. 3). 
Noonan vs. Caledonia Gold Mining Co., 121 U. 

S. 393, 400; 7 Sup. Ct. 911; 30 L. Ed. 1061. 
Burton vs. Driggs, 20 Wall. 125, 22 L. Ed. 299. 



vs. Park Lusk 71 

Stebbins vs. Duncan, 108 U.S. 32; 2 Sup. Ct. 

313; 27 L. Ed. 641. 
Wood vs. Weiman, 104 U.S. 786, 795; 26 L. Ed. 

779. 

(c) There was no objection made to either of the 
expert witnesses for the appellee that their opinion 
was based upon incompetent and conflicting, or in- 
competent or conflicting evidence or called for a state- 
ment of the ultimate facts. 

Camden vs. Doremus, 3 How. 515; 11 L. Ed. 

705. 
Burton vs. Driggs, 20 Wall. 125, 133; 22 L. Ed. 

299. 
Continental Ins. Co. vs. Fortner, 25 Fed. (2d) 

398 (CCA. 6). 
Twohy Bros. Co. vs. Kennedy, 295 Fed. 462 

(CCA. 9). 
Quaker Oats Co. vs. Grice, 195 Fed. 441 (CC 

A. 2). 
22 CJ., page 710, Sec. 800. 
Jones, Commentaries on Evidence, Second Edi- 
tion, Volume 3, page 2452, Sec. 1341. 
Knight vs. Overman Wheel Co. (Mass.), 54 N.E. 

890. 
Prosser vs. Montana Central Ry. Co. (Mont.), 

43 Pac. 81. 
Williams vs. Marini, 162 Atl. 796. 

Proposition of Law No. 7 

The work record of appellee since he was gassed in 
the war is not a bar to recovery. 



72 United States of America 

U.S. vs. Alger, 68 Fed. (2d) 592 (CCA. 9). 
U.S. vs. Dudley, 64 Fed. (2d) 743 (CCA. 9). 
U.S. vs. Rasar, 45 Fed. (2d) 545 (CCA. 9). 
U.S. vs. Jensen, 66 Fed. (2d) 19 (CCA. 9). 
U.S. vs. Suomy, 70 Fed. (2d) 542 (CCA. 9). 
U.S. vs. Lawson, 50 Fed. (2d) 646 (CCA. 9). 
U.S. vs. Baxter, 62 Fed. (2d) 182 (CCA. 9). 
U.S. vs. Burleyson, 64 Fed. (2d) 868 (CCA. 9). 
U.S. vs. Francis, 64 Fed. (2d) 865 (CCA. 9). 
Fladeland vs. U.S., 53 Fed. (2d) 17 (CCA. 9). 
Storey vs. U.S., 60 Fed. (2d) 484 (CCA. 10). 
U.S. vs. Fry (CCA. 4), 71 Fed. (2d) 423. 

In the last case cited we have a refusal of the Cir- 
cuit Court for the Fourth Circuit to reverse the Trial 
Court or the judgment of the jury, in a case very 
similar to this resulting from the gassing in the World 
War, resultant chronic bronchitis and where vocational 
training record was involved. 

Proposition of Law No. 8 
Inconsistencies in appellee's statements, written or 
oral, were matters for the jury to determine, and its 
determination is final. 

U. S. vs. Dudley, 64 Fed. (2d) 743. 
U.S. vs. Albano, 63 Fed. (2d) 677 (CCA. 9). 
La Marche vs. U.S., 28 Fed. (2d) 828 (CCA. 9). 
Title 38, U.S.CA., Sec. 515. 

Proposition of Law No. 9 

Appellee's delay in filing his complaint was fully 
explained, excused and justified, and is not to be used 
as evidence against him. 



vs. Park Lusk 73 

Lumbra vs. U.S., 290 U.S. 551; 54 Sup. Ct. 272, 
78 L. Ed. 492. 

C. 875, par. 1, 45 Stat. 964; par. 445, Title 38, 
U.S.C.A. 

C. 849, par. 4, 46 Stat. 992; par. 445, Title 38, 
U.S.C.A. 

Report by Senator Shortridge from the Com- 
mittee on Finance, dated June 9, 1930, and 
known as Report No. 885 of the 71st Congress, 
second session, to accompany Calendar No. 
906, on page 4 thereof. 

Hayden vs. U.S. (CCA. 9), 41 Fed. (2d) 614. 

Proposition of Law No. 10 

There was no prejudicial error or reversible error in 
permitting the medical experts to express their opinion 
as to total and permanent disability of the appellee. 

(a) The admission of this testimony was discretion- 
ary with the Trial Court. 

Hamilton vs. U.S., 73 Fed. (2d) 357. 

Gila Valley, Etc. Ry. Co. vs. Lyon, 203 U.S. 

465; 27 Sup. Ct. 145; 51 L. Ed. 376. 
Spring Company vs. Edgar, 99 U.S. 645; 25 L. 

Ed. 487. 
U.S. vs. Lumbra (CCA. 2), 63 Fed. (2d) 796. 
U.S. vs. Barker, 36 Fed. (2d) 556. 
S.W. Metals Co. vs. Gomez, 4 Fed. (2d) 215, 

218. 

(b) Other evidence of the same nature was admitted 
without objection, being presented by appellant. 



74 United States of America 

U.S. vs. Sauls, 65 Fed. (2d) 886 (CCA. 4). 
U.S. vs. Dudley, 64 Fed. (2d) 743. 
Shwab vs. Doyle, 269 Fed. 321 at 333. 
Prevette vs. U.S., 68 Fed. (2d) 112. 

(c) This rule of practice has been long indulged in 
and acquiesced in by the Courts and should not be 
abruptly overturned. 

U.S. vs. Lawson, 50 Fed. (2d) 646 (CCA. 9). 
U.S. vs. Dudley, 64 Fed. (2d) 743 (CCA. 9). 
U.S. vs. Jensen, 66 Fed. (2d) 19 (CCA. 9). 
U.S. vs. Francis, 64 Fed. (2d) 865 (CCA. 9). 
U.S. vs. Messinger, 68 Fed. (2d) 234 (CCA. 4). 
U.S. vs. Sorrow, 67 Fed. (2d) 372 (CCA. 5). 
U.S. vs. Ellis, 67 Fed. (2d) 765 (CCA. 5). 
U.S. vs. Tyrakowski, 50 Fed. (2d) 766 (CC.A.7). 
Asher vs. U.S., 63 Fed. (2d) 20 (CCA. 8). 
U.S. vs. Thomas, 64 Fed. (2d) 245 (CCA. 10). 
U.S. vs. Woltman, 57 Fed. (2d) 418 (C of A., 
D.C). 

And we respectfully cite on the general proposition 
above stated these additional cases: 

Russell's Estate, 210 Pac. 249 (Cal.), 189 Cal. 

759. 
U.S. vs. Monger, 70 Fed. (2d) 361 (CCA. 10). 
4 Wigmore on Evidence (2d Ed.), Sees. 1920 

and 1921. 
St. Louis Etc. Co. vs. Edwards, 24 CCA. 300; 

78 Fed. 745. 
Chicago Great Western Ry. Co. vs. Price, 38 C 

CA. 239; 97 Fed. 423. 



vs. Park Lusk 75 

Taylor vs. Town of Monroe, 43 Conn. 36. 
Atchison T. Etc. Co. vs. Myers, 63 Fed. 792 at 

796 (CCA. 7). 
Hammond vs. Woodman, 66 Am. Dec. 219, 235. 
U.S. vs. Barker, 36 Fed. (2d) 556. 
Law vs. U.S., 290 Fed. 972. 
United States vs. Law, 299 Fed. 61 (CCA. 9). 
Ford vs. U.S., 44 Fed. (2d) 754 (CCA. 1). 
U.S. vs. McGrory, 63 Fed. (2d) 697 (CCA. 1). 
U.S. vs. Lumbra, 63 Fed. (2d) 796 (CCA. 2). 
U.S. vs. Auer, 51 Fed. (2d) 921 (CCA. 3). 
U.S. vs. Fritz, 66 Fed. (2d) 300 (CCA. 3). 
Carter vs. U.S., 49 Fed. (2d) 221 (CCA. 4). 
White vs. U.S., 53 Fed. (2d) 565 (CCA. 5). 
Bartee vs. U.S., 60 Fed. (2d) 247 (CCA. 6). 
U.S. vs. Gwin, 68 Fed. (2d) 124 (CCA. 6). 
U.S. vs. Crain, 63 Fed. (2d) 528 (CCA. 7). 
Green vs. U.S., 57 Fed. (2d) 9 (CCA. 8). 
U.S. vs. Worley, 42 Fed. (2d) 197, 199 (CC 

A. 8). 
U.S. vs. Meserve, 44 Fed. (2d) 549 (CCA. 9). 
U.S. vs. Law, 299 Fed. 61 (CCA. 9), reversed 

on other grounds, 266 U.S. 494, 69 L. Ed. 401, 

45 S. Ct. 175. 
Nicolay vs. U.S., 51 Fed. (2d) 170 (CCA. 10). 
41 Stat. 371, 38 U.S.C.A. 473. 
Hearings before the Sub Committee on Insur- 
ance, Seventieth Congress, First Session, on 

H.R. 8333, page 105. 
Lumbra vs. U.S., 290 U.S. 551, 558; 54 S. Ct. 

272, 78 L. Ed. 492. 



76 United States of America 

Lynch vs. U.S., 292 U.S. 571; 54 S. Ct. 840, 78 

L. Ed. 1434. 
Transportation Line vs. Hope, 95 U.S. 297; 24 

L. Ed. 477. 
U.S. Smelting Co. vs. Parry, 166 Fed. 407 (C. 

C.A. 8). 
Cropper vs. Titanium Pigment Co., 47 Fed. (2d) 

1038; 78 A.L.R. 737. 
Texas & Pacific R. Co. vs. Watson, 190 U.S. 

287; 23 S. Ct. 681; 47 L. Ed. 1057. 
Gila Valley Etc. Ry. Co. vs. Lyon, 203 U.S. 

465; 27 S. Ct. 145; 51 L. Ed. 276. 
Northern Pacific Railroad vs. Urlin, 158 U.S. 

271; 15 S. Ct. 840; 39 L. Ed. 977. 
Union Insurance Co. vs. Smith, 124 U.S. 405; 

8 S. Ct. 534; 31 L. Ed. 497. 
Connecticut Mutual Life Ins. Co. vs. Lathrop, 

111 U.S. 612; 4 S. Ct. 533; 28 L. Ed. 536. 
Spring Co. vs. Edgar, 99 U.S. 645; 25 L. Ed. 487. 
Holmes vs. Goldsmith, 147 U.S. 150, 164; 13 

S. Ct. 288; 37 L. Ed. 118. 
Williamson vs. U.S., 207 U.S. 425, 451; 28 S. 

Ct. 163; 52 L. Ed. 278. 
Alexander vs. U.S., 138 U.S. 353, 356; 11 S. Ct. 

350; 34 L. Ed. 954. 
Moore vs. U.S., 150 U.S. 57, 60; 14 S. Ct. 26; 

37 L. Ed. 996. 
Clune vs. U.S., 159 U.S. 590, 592; 16 S. Ct. 125; 

40 L. Ed. 269. 
American Agricultural Chemical Company vs. 

Hogan, 213 Fed. 416 (CCA. 1). 



vs. Park Lusk 77 

Ekblom vs. Reed, Inc., 71 Fed. (2d) 339 (C.C. 

A. 5). 
Hutchinson Cooperage Co. vs. Snider, 107 Fed. 

633 (CCA. 7). 
Western Coal & Mining Company vs. Berberich, 

94 Fed. 329 (CCA. 8). 
Illinois Power & Light Company vs. Hurley, 49 

Fed. (2d) 681 (CCA. 8). 
Hartford Fire Ins. Co. vs. Empire, 30 Fed. (2d) 

794 (CCA. 8). 
D. & R.G. Ry. Co. vs. Roller, 100 Fed. 738 (C 

CA. 9). 
Runkle vs. U.S., 42 Fed. (2d) 804 (CCA. 10). 
New York Life Insurance Company vs. Doerk- 

sen, 64 Fed. (2d) 240 (CCA. 10). 
U.S. Radiator Corp. vs. Henderson, 68 Fed. (2d) 

733 (CCA. 10), cert, denied 292 U.S. 650. 
Murray vs. U.S., 288 Fed. 1008 (C of A.D.C). 
U.S. vs. Woltman, 57 Fed. (2d) 418 (C of A. 

D.C). 
Carpenter vs. Walker, 170 Ala. 659; 54 So. 60; 

Ann. Cases 1912 D 863. 
Watson vs. Hardaway-Covington Co., 137 So. 

33 (Ala.). 
Jones vs. Caldwell, 20 Idaho 5; 116 Pac. 110. 
Chicago Union Traction Company vs. Roberts, 

229 111. 481; 82 N.E. 401. 
Searles vs. Northwestern Mutual Life Ins. Co., 

148 la. 65; 126 N.W. 801; 29 L.R.A. (N.S.) 

405. 
Beaubien vs. Cicotte, 12 Mich. 459. 
State vs. Cox, 172 Minn. 226; 215 N.W. 189. 



78 United States of America 

Donnelly vs. St. Paul Ry. Co., 70 Minn. 278; 

73 N.W. 157. 
Finn vs. Cassidy, 165 N.Y. 584; 59 N.E. 311; 

53 L.R.A. 877. 
Littlejohn vs. Shaw, 159 N.Y. 188; 53 N.E. 810. 
Scalf vs. Collin County, 80 Tex. 514; 16 S.W. 

314. 
Baldwin vs. Gaines, 92 Vt. 61; 102 Atl. 338. 
Patrick vs. Smith, 75 Wash. 407; 134 Pac. 1076; 

48 L.R.A. (N.S.) 740. 
78 A.L.R., Note page 755. 
11 R.C.L., page 583, paragraph 14. 
Ascher vs. U.S., 63 Fed. (2d) 20, 23 (CCA. 8). 

(d) It is neither incompetent nor prejudicial for an 
expert witness to have the plaintiff expose his chest 
and the expert illustrate and make clear his findings 
and diagnosis. 

In actions for personal injuries, it is the constant 
practice for the plaintiff voluntarily to exhibit the in- 
jured part to the jury. 

Jones' Commentaries on Evidence, Second Edi- 
tion, Vol. 3, Sec. 1392. 

Anderson vs. Seropian, 147 Cal. 201, 81 P. 521. 

Friedler vs. Hekeler, 96 Conn. 29, 112 A. 651. 

Southern R. Co. vs. Brock, 132 Ga. 858, 64 S.E. 
1083. 

Pidcock vs. West, 24 Ga. App. 785, 102 S.E. 360. 

Walsh vs. Chicago Rys. Co., 303 111. 339, 135 
N.E. 709. 

Swift & Co. vs. Rutkowski, 182 111. 18, 54 N.E. 
1038. 



vs. Park Lusk 79 

Chicago Etc. R. Co. vs. Clausen, 173 111. 100, 

50 N.E. 680. 
Lanark vs. Dougherty, 153 111. 163, 38 N.E. 892. 
Wolf vs. Crook, 163 111. App. 511. 
Tijan vs. Illinois Steel Co., 158 111. App. 30, 

affirmed 250 111. 554, 95 N.E. 627. 
Turon vs. Chicago City Ry. Co., 152 111. App. 

351. 
Allison vs. Electric Coal Co., 151 111. App. 55. 
Vance vs. Monroe Drug Co., 149 111. App. 499. 
Mclwain vs. Gaebe, 128 111. App. 209. 
American Brake Shoe Etc. Co. vs. Jankus, 121 

111. App. 267. 
Ewald vs. Michigan Cent. R. Co., 107 111. App. 

294. 
West Chicago St. R. Co. vs. Grenell, 90 111. App. 

30. 
Swift vs. O'Neill, 88 111. App. 162, affirmed 187 

111. 337, 58 N.E. 416. 
Jefferson Ice Co. vs. Zwicokoski, 78 111. App. 646. 
Seltzer vs. Saxton, 71 111. App. 229. 
Pittsburgh Etc. R. Co. vs. Lightheiser, 168 Ind. 

438, 78 N.E. 1033. 
Aspy vs. Botkins, 160 Ind. 170, 66 N.E. 462. 
Citizens' St. R. Co. vs. Willoeby, 134 Ind. 563, 

33 N.E. 627. 
Hess vs. Lowrey, 122 Ind. 225, 17 A.S.R. 355, 

23 N.E. 156, 7 L.R.A. 90. 
Louisville Etc. R. Co. vs. Wood, 113 Ind. 544, 

14 N.E. 572, 16 N.E. 197. 
Indiana Car Co. vs. Parker, 100 Ind. 181. 



80 United States of America 

Cleveland Etc. R. Co. vs. Colson, 51 Ind. App. 

225, 99 N.E. 433. 
Freeman vs. Hutchinson, 15 Ind. App. 639, 43 

N.E. 16. 
Barker vs. Perry, 67 Iowa 146, 25 N.W. 100. 
Schroeder vs. Chicago Etc. R. Co., 47 Iowa 375. 
Thompson vs. Webb, 5 Kan. App. 879 mem., 48 

P. 752. 
Newport News & M.V. Co. vs. Carroll, 17 Ky. 

L.R. 374, 31 S.W. 132. 
Ford vs. Providence Coal Co., 124 Ky. 517, 99 

S.W. 609. 
Jameson vs. Weld, 93 Me. 345, 45 A. 299. 
Rohrer vs. Schreiber, 223 Mich. 355, 193 N.W. 

905. 
Barfoot vs. White Star Line, 170 Mich. 349, 136 

N.W. 437. 
Edwards vs. Three Rivers, 96 Mich. 625, 55 

N.W. 1003. 
Graves vs. Battle Creek, 95 Mich. 266, 35 A.S. 

R. 561, 19 L.R.A. 641, 54 N.W. 697. 
French vs. Wilkinson, 93 Mich. 322, 53 N.W. 

530. 
Brown vs. Douglas Lumber Co., 113 Minn. 67, 

129 N.W. 161. 
Clay vs. Chicago Etc. R. Co., 104 Minn. 1, 115 

N.W. 949. 
Adams vs. Thief River Falls, 84 Minn. 30, 86 

N.W. 767. 
Hatfield vs. St. Paul Etc. R. Co., 33 Minn. 130, 

53 Am. Rep. 14, 22 N.W. 176, 18 Am. & Eng. 

R. Cas. 292. 



vs. Park Lusk 81 

Turnbow vs. Kansas City Rys. Co., 277 Mo. 644, 

211 S.W. 41 (Legs.). 
Wills vs. Browning, 161 Mo. App. 461, 143 S.W. 

516. 
Sampson vs. St. Louis Etc. R. Co., 156 Mo. App. 

419, 138 S.W. 98. 
Houston vs. Chicago Etc. R. Co., 118 Mo. App. 

464, 94 S.W. 560. 
Orscheln vs. Scott, 90 Mo. App. 352. 
Stephens vs. Elliott, 36 Mont. 92, 92 P. 5. 
Felsch vs. Babb, 72 Neb. 736, 101 N.W. 1011. 
Chicago Etc. R. Co. vs. Krayenbuhl, 70 Neb. 

766, 98 N.W. 44. 
Omaha St. R. Co. vs. Emminger, 57 Neb. 240, 

77 N.W. 675. 
Crete vs. Hendricks, 2 Neb. Unof. 847, 90 N.W. 

215. 
Nebonne vs. Concord R.R., 68 N.H. 296, 44 A. 

521. 
Wood vs. Morris & Co. (N.J. Supp.), 126 A. 434; 
Mulhado vs. Brooklyn City R. Co., 30 N.Y. 370. 
Lacs vs. James Everard's Breweries, 61 App. 

Div. 431, 70 N.Y.S. 672, reversed on other 

grounds in 170 N.Y. 444, 63 N.E. 448. 
Perry vs. Metropolitan St. R. Co., 68 App. Div. 

351, 74 N.Y.S. 1. 
Butez vs. Fonda Etc. R. Co., 20 Misc. 12, 45 

N.Y.S. 808. 
Jordan vs. Bowen, 46 Super. Ct. 355. 
Hiller vs. Sharon Springs, 28 Hun. 344. 
McNaier vs. Manhattan R. Co., 51 Hun. 644, 

4 N.Y.S. 310. 



82 United States of America 

Continental Casualty Co. vs. Wynne, 36 Okl. 

325, 129 P. 16. 
Patterson vs. Howe, 102 Or. 275, 202 P. 225. 
Arkansas River Packet Co. vs. Hobbs, 105 Tenn. 

29, 58 S.W. 278. 
St. Louis Etc. R. Co. vs. Mathis, 101 Tex. 342, 

107 S.W. 530. 
Chicago Etc. R. Co. vs. De Bord, 62 Tex. Civ. 

App. 302, 132 S.W. 845. 
Houston Etc. R. Co. vs. Anglin (Tex. Civ. App.), 

86 S.W. 785. 
Texas Midland R. Co. vs. Brown (Tex. Civ. 

App.), 58 S.W. 44. 
Missouri Etc. R. Co. vs. Moody, 35 Tex. Civ. 

App. 46, 79 S.W. 856. 
Cunningham vs. Union Pac. R. Co., 4 Utah 206, 

7 P. 795. 
Cook vs. Danaher Lumber Co., 61 Wash. 118, 

112 P. 245. 
Dunkin vs. Hoquiam, 56 Wash. 47, 105 P. 149. 
Carico vs. West Virginia Cent. Etc. R. Co., 39 

W. Va. 86, 24 L.R.A. 50, 19 S.E. 571. 
Disotell vs. Henry Luther Co., 90 Wis. 635, 64 

N.W. 425. 
Brown vs. Swineford, 44 Wis. 282, 28 Am. Rep. 

582. 
Osborne vs. Detroit, 32 Fed. 36, reversed on 

other grounds; Detroit vs. Osborne, 135 U.S. 

492, 34 L. Ed. 260, 10 S. Ct. 1012 (see also 

Rose's U.S. Notes). See also Springer vs. Chi- 
cago, 135 111. 552, 12 L.R.A. 609, 26 N.E. 514. 



vs. Park Lusk 83 

South Bend vs. Turner, 156 Ind. 418, 83 A.S.R. 
200, 54 L.R.A. 396, 60 N.E. 271. 

Faivre vs. Mandercheid, 117 Iowa 724, 90 N.W. 
76. 

Ottawa vs. Gilliland, 63 Kan. 165, 88 A.S.R. 
232, 65 P. 252. 

Rost vs. Brooklyn Heights R. Co., 10 App. Div. 
477, 41 N.Y.S. 1069. 

Roberts vs. Ogdensburgh Etc. R. Co., 29 Hun. 
(N.Y.) 154. 

Cole vs. Fall Brook Coal Co., 87 Hun. 584, 34 
N.Y.S. 572. 

Looram vs. Second Ave. R. Co., 11 N.Y. St. 
Rep. 652. 

Jackson vs. Wells, 13 Tex. Civ. App. 275, 35 
S.W. 528. Compare: Sornberger vs. Cana- 
dian P. R. Co., 24 Ont. App. 263. 

Laughhn vs. Harvey, 24 Ont. App. 438. 

ARGUMENT 

In this case we have at the opening of the trial the 
two parties to the litigation stipulating Rule No. 11 as 
admitted into evidence as plaintiff's Exhibit No. 1 
(Rule 11 being T.D. 20 W.R.) issued and promul- 
gated by the Treasury Department March 9, 1918, 
and in addition we have the appellant in its closing 
statement in the brief (p. 38) stating that the govern- 
ment's contention that the errors assigned and dis- 
cussed should be well taken on this appeal and that 
the physical facts disclosed that the plaintiff was not 
totally and permanently disabled at the time when his 



84 United States of America 

policy of insurance lapsed and has not been totally 
and permanently disabled since that time within the 
meaning of permanent and total disability as defined by 
the secretary and interpreted by the Courts, and that 
the judgment heretofore entered in this case should be 
reversed. (Italics ours.) 

Thus the appellant's contention is that the contract 
of insurance sued upon embodied that regulation and 
that they now complain to this Appellate Court that 
appellee was not totally and permanently disabled 
within the terms of the contract, which included that 
rule or regulation and definition. 

Appellant in the argument contained in the brief also 
makes a few statements to which we wish to address 
ourselves at this time. They made no reference in the 
objection to the hypothetical question that it con- 
tained a mis-statement of fact, which they refer to at 
page 33 of their brief as taken from the hypothetical 
question which they have set up among their assign- 
ments of error at page 224 and containing the follow: 
ing: "during which time he threw up every breakfast 
for seven months continuously as well as vomiting on 
the occasion of his taking other meals." Now let us go 
to the record and we find: "After breakfast he would 
go outside and vomit his breakfast. There was a log 
on the north end of our house and he used to make 
for there and he would lean on the log and lose his 
breakfast. That happened every morning. At times 
he would vomit his supper. * * * After this seven 
months' period he and his wife lived a few hundred 
feet of our house until she died on February 22, 1922" 
(Tr. 54). Had counsel made such an objection at the 



vs. Park Lusk 85 

time of the trial the reporter's record would have been 
available to permit the attorneys and the Court to 
show the accuracy of the statement, and even now at 
this late date it develops that appellant's statement in 
the brief is in error and the fact as presented in the 
hypothetical question is the exact fact as testified to 
during the trial. 

Again at the bottom of page 33 of appellant's brief 
they objected to this statement, ''that during the first 
seven months after he was home he never retained a 
breakfast, going out within fifteen, twenty or thirty 
minutes after he ate and vomiting it up; that he had 
vomiting spells with extra exertion and in connection 
with his meals other than his breakfast throughout this 
period." In addition to the statement we have just 
quoted from transcript page 54, we think a reference 
to the statement of facts as we have presented them 
in this brief will clearly show that these additional facts 
are in the record of testimony. 

Then on page 34 of their brief they allegedly quote: 
''not going out in the morning because of his weakness 
due to the vomiting" (Tr. 228), and "he didn't go out 
mornings because of his weakened condition following 
vomiting and those things" (Tr. 228) and they say 
these are continuations of the same overstatement. Let 
us see what the facts are. In the hypothetical question 
itself we find the context and full statement as placed 
in the hjrpothetical question as follows: "Sometimes 
leaving during the time of doing the work during the 
ordinary working hours of the day, and other times 
not going back to work — or not going out in the morn- 
ing because of his weakness due to the vomiting." 



86 United States of America 

Now the transcript of the record shows the evidence 
as introduced in connection with that statement in the 
hypothetical question as follows: ''I don't think I ever 
did work two days straight. It would be days and 
half days. I would quit work and not work at all 
because I was so weak I couldn't work. There were 
times in the mornings I couldn't go out. After I vom- 
ited I would still have those gas pains and my brother 
would go out and take the team and I would stay in 
the house" (Tr. 82-83), and the following: '1 did not 
work at that steady one day after another. There 
would be mornings when I would take to vomiting and 
was too weak" (Tr. 89). 

Then at the bottom of page 34 of appellant's brief we 
find the following quotation ''would remain in the home 
trying to rest" Tr. 228), and then appellant contend 
that on page 35 this is an expression constituting an 
overstatement of fact. The testimony in the record is: 
'^Some days he came to the house at eleven o'clock or 
eleven-thirty and would rest until noon" (Tr. 54), cer- 
tainly a substantial statement of the fact. Then in 
the brief again immediately following the statement 
just quoted appellant says, "that in the combine work, 
as I say, he drove the team and he would plow some, 
especially as I have just related to plowing and drill- 
ing" (Tr. 228) ; ''that he had continually taken medicine 
since he has come home, part of it being castor oil and 
the whiskey and alcohol which was prescribed for him 
in France" (Tr. 229); "sometimes his wife worked on 
the combine handling the sacks when he was driving 
and this was because he was unable to do that heavier 
work while his wife could" (Tr. 230); "would have to 



vs. Park Lusk 87 

stop and catch his breath, then possibly go home" 
(Tr. 230), and then it is stated at page 35 of the brief, 
'That these expressions constitute an overstatement of 
facts, conclusions on the part of the framer of the 
question and emphasis of the ultimate fact to be deter- 
mined by the jury, in the presence of the jury. In 
other words, the hypothetical question contains within 
itself statement of conclusions and ultimate facts which 
the witness himself is asked to determine and for that 
reason the question is not a substantial statement of 
the evidence as it exists." 

Now let us, just for the sake of accuracy, go to the 
record and review these statements by the appellant, 
keeping all in the order as above given. 

As to the first statement that he drove the team and 
the combine work, there are several references in the 
record, but we will refer but to one: '*I would drive 
the combine and teams" (Tr. 104). As to the fact 
that he would plow some as just related to plowing 
and drilling, we must have the context in the hypo- 
thetical question in order to ascertain whether or not 
it is an erroneous statement as to the plowing. Just 
preceding the statement quoted in appellant's brief we 
find this in the hypothetical question: ''In that man- 
ner he managed to deliver the grain to the drill and 
he drilled a part of some thirteen or fourteen days but 
not continuously, similar to the plowing. He would 
have to leave the drill and the dust would bother him 
and he would start coughing and he had pains in the 
chest and stomach. He would get off the drill and rest 
a while and go home before the day's work was done 
and on other occasions he didn't go out mornings 



88 United States of America 

because of his weakened condition following vomiting 
and those things." In our statement of facts, under 
the work and employment record subdivision, we have 
very fully set up the testimony as to just how he did 
the plowing and drilling, and we shall not here repeat. 

The next thought that ''since he came home he has 
continually taken medicine, part of it being castor oil 
and whiskey and the alcohol which was prescribed to 
him in France," the record is very clear. ''At the base 
hospital in France mornings they would give me a 
glass full of alcohol reduced a little with hot water 
and sugar, two little pills and a dose of castor oil" 
(Tr. 80). "I continued to take these medicines all the 
while I was in France" (Tr. 80). Again upon his re- 
turn home, "After I vomited I would still have those 
gas pains and my brother would go out and take the 
team and I would stay in the house. A little liquor 
usually helped me. It stopped the pain and checked 
the vomiting" (Tr. 83). Again we find: "The medi- 
cine that he gave me was a glass of alcohol every 
morning, noon and night, diluted with hot water * * * 
I have kept it all these years. I have it with me now" 
(Tr. 94). 

That the appellee made a living — a fair living — 
through the aid and help of others was brought out 
by appellant on cross-examination by the introduction 
of Exhibit 9, where appellee had stated: "I make a 
fair living," and by elaboration on this on redirect 
examination the testimony shows, "I did not make a 
living for myself and family throughout those years. 
As to how I secured our living I don't know how to 
answer that unless I would say from the help of others 



vs. Park Lusk 89 

along with my own" (Tr. 105). That *'his wife some- 
times worked on the combine handhng the sacks when 
he was driving and this was because he was unable 
to do that heavier work while his wife could," as above 
referred to, let us go to the record. "During the 
three days I (Mrs. Lusk) worked on the combine in 
1933 he (Mr. Park Lusk) was driving the team; that 
was because they needed someone and Mr. Lewis could- 
n't remain." Again, 'Tark Lusk generally drove the 
combine when he could. That would require eight to 
twelve horses and he could drive the team himself 
(Tr. 71). When I was sacking grain we would stop 
now and then, something would get the matter with 
the combine, he would stop sometimes when he would 
start to cough. He couldn't drive when he was cough- 
ing * * * He would have to stop quite often to 
cough and if the wheat came too fast I (Mrs. Lusk) 
would have to stop" (Tr. 71). 

As to his stopping to catch his breath, this had to do 
with his chopping wood and we quote from the record : 
"When he chopped a while he would sit down and 
cough and he got out of wind" (Tr. 62). Again we 
find: "He tried to help chop and wouldn't have the 
wind to use an axe. He could only chop about half a 
minute. He tried that on numerous occasions" (Tr. 
83). In other words the statements in the hypotheti- 
cal question were a substantial statement of the facts 
as testified to and were not at all exaggerated as appellant 
would imply from his disconnected excerpts from the 
testimony. 

We agree with counsel in their statement on page 
35 of their brief that they intended to object to the 



90 United States of America 

hypothetical question upon the ground that any opin- 
ion would invade the province of the jury. In other 
words it appeared to be their contention that no opin- 
ion might be given by an expert, as note their objection 
(Tr. 156) that it (the hypothetical question) invades 
the province of the jury. It may be that we are in 
error as to the right of the expert to give an opinion 
as to the degree of disability but certainly there can 
be no valid objection to seeking the opinion of one 
qualified in the science of medicine to give an opinion 
as to the disability from which the individual may 
suffer or has been suffering at some time in the past, 
nor as to an opinion as to the permanency of that dis- 
ability. If there was any invasion at all of the province 
of the jury it might be upon the theory that the word 
"total" should not have been used, or an opinion given 
upon that; but appellant's contention seems to be far 
more than that, that no opinion of any kind might be 
given by anyone as an aid to the jury or the Court 
in arriving at the issues in the case. We most certainly 
and emphatically contend that that is an erroneous 
position. The Supreme Court of the United States has 
supported the contention and the position of various 
Circuit Courts in the holding that it requires someone 
familiar with the disabilities that the human body is 
suffering from, the necessity for a designation by one 
expert in anatomy as to whether there is anything at 
all wrong either mentally or physically with the indi- 
vidual and to designate by name the disability and to 
express an opinion as to its permanency. Some Courts 
(this Court among others) have held that to give the 
opinion that there was a degree of "total" disability 



vs. Park Lusk 91 

under the definition as embodied in the contract was 
an invasion of the province of the jury, and, conceding 
that this may be correct, nevertheless appellant's con- 
tention that the expert might give no opinion is far 
beyond any reasonable application of the law, and all 
the testimony of the experts save and except that per- 
taining to the degree must be conceded to be proper, 
and as to that, there, in this case could be no invasion 
of the province of the jury because of the fact that 
there was a decided conflict in the testimony — some of 
the medical men contending there was no disability 
whatever, it being only ''imaginary/' being the posi- 
tion of one of the experts, while others conceded there 
was some disability, and others contended it was a 
"total" disability under the definition of the contract, 
which definition was received at the proceeding as the 
definition in the contract of insurance, and from among 
these various opinions the jury made its own selection, 
and determination, and decided it was ''total" disabil- 
ity under the definition given to it by the Court as 
embodied in the contract and by stipulation. 

As to the discussion as to conflicting statements ap- 
pearing in the hjrpothetical question, counsel is not kind 
enough even at this late date in its discussion in its 
brief before this Court to point out wherein there was 
conflict of statement of fact and wherein the witness 
was called upon to weigh the statements and determine 
which is the truth and they utterly failed to point out 
any such conflicts in their objection. The objection 
was not specific, it was not informative to the Trial 
Court or counsel, no opportunity was given to make a 
correction if error was made, and we at this time 



92 United States of America 

challenge counsel to point out in oral argument to 
this Court wherein there was any conflict save and 
except as to the varying weights and as to them every 
weight, as referred to in the testimony was given in 
the hypothetical question, without any selection as to 
certain weights as being correct or possibly incorrect, 
and under cross-examination no effort was made to 
substitute the selection of certain weights for others, 
and the other conflict, if such it might be termed, grew 
out of a denial of the accuracy of the so-called A.G.O. 
report as to the health of the plaintiff at the time of his 
severance of his military service, in other words a direct 
contradiction of the statement as appearing in the A.G.O. 
report as to the condition of his health at that time, 
and as we have heretofore set up in our authorities, 
this was merely explanatory of the accuracy of that 
statement as to his health at that time and is not a 
conflict of statements. The plaintiff, it is true, an- 
swered for a certain purpose and with a definite objec- 
tive in mind (to- wit his severance from the service), 
that he knew of no injury or disability resulting from 
the service, and as we have elsewhere pointed out, this 
was due to the fact that he was as ignorant of the 
effect of poison gas upon his system as were the medi- 
cal authorities at that time, he hoping and trusting 
there would be no resultant ill effects and only through 
the course of the years did he learn the error of that 
judgment and the error of the judgment of the medical 
men. It seemed to have been assumed by all parties 
at that time that this gas poison would wear off and 
there would not be a permanent disability as a result 
of the inhaling of the mustard and chlorine gas. This 



vs. Park Lusk 93 

was not a conflict of testimony but was merely the 
unfortunate and erroneous opinion of a layman as to 
the effects of this gas upon his body at the time of his 
leaving the service and a full and true and accurate 
statement of the actual result as experienced through 
the years following that time. 

Counsel at page 35 of their brief use this language : 
"If the question is not a fair, substantial statement of 
bare facts, then the opinion of the witness is based 
not only upon conflicting evidence but upon conclu- 
sions and opinions and the interpretation of the evi- 
dence as conceived by the propounder of the question, 
which results in the basing of an opinion upon opinions. 
This is clearly contrary to law." 

We are frank to confess that we are unable to ascer- 
tain from this statement what counsel has in mind. 
In what way or wherein is the hypothetical question 
not a fair and substantial statement of the facts? 
They failed to give this information to the Trial Court 
and failed to give it to this Court. If there was a fail- 
ure to present the substantial facts, it is of course 
their province, under cross-examination, to supply the 
additional facts and secure from the expert a contrary 
opinion based upon new or additional facts which were 
not included or embodied in the hypothetical question. 
This they did not do and certainly should not be per- 
mitted to argue that question for the first time before 
this Court. 

At page 36 of appellant's brief a discussion dealing 
with the subject, ''medical expert's opinion must be 
based upon symptoms which were known at the time 



94 United States of America 

the policy lapsed and those symptoms must disclose 
permanent disability." Dr. Groom (Tr. 155) states: 

'*Q. What diagnosis did you make, and what 
ailments, if any, did Park Lusk suffer from as a 
a result of your examination, plus the assumed 
facts? 

<<A * * * J would make a diagnosis of chron- 
ic bronchitis, chronic gastro-intestinal disturb- 
ances, chronic conjunctivitis and chronic laryn- 
gitis. 

*'Q. Due to what? 

''A. Due to the gas poisoning he had received 
in the army," 

and at transcript page 156 we find : 

''Q. Has he been disabled totally and perma- 
nently from that date to the present time? 

''A. Yes, sir. 

"Q. Is it your best judgment it will continue 
and that he will remain — that Park Lusk will 
remain totally and permanently disabled through- 
out the remainder of his life? 

''A. Yes, sir." 

Dr. Kackley stated. Transcript page 136: 

*'Q. When was he first totally and permanently 
disabled under that definition? 

''A. From the time he received the poison gas. 

"Q. And has he been so totally and permanently 
disabled from that time up to the present, in your 
opinion, and will that condition remain through- 
out the remainder of his life, in your opinion? 

"A. I think so.'* 



vs. Park Lusk 95 

The symptoms growing out of his inhahng of gas 
among others were the following: 'These gases were 
mixed with various chemicals that produced irritaion 
of the mucous membranes of the eyes and it produced 
severe congestion of or inflammation of the membranes 
of the tonsils and larynx which would be likened to 
a severe sore throat * * *. There was first a burn- 
ing of the bronchii, the bronchial tree and cells 
* * *. Then due to the inhalation of this gas 
it produced a vomiting — the gas produced that 
(Tr. 151). This condition went on for several days or 
more, depending upon the amount of gas taken and 
these inflamed areas became infected and the patient 
became sick. He had to leave the field of action and 
was taken to a hospital, where a great majority of 
them who had been gassed severely developed a bron- 
chial pneumonia and gastro intestinal troubles * * *. 
These conditions went on and as the condition im- 
proved, from their bronchial pneumonia they would 
have a cough, of course, and sometimes spit up blood 
and coughed. The entire respiratory system was se- 
verely infected in these cases. * * * There would 
be a contraction of the various areas of the bronchial 
tubes and in some cases it shut off their breathing (Tr. 
152). * * * They would be subject to recurrent 
attacks of broncho-pneumonia, bronchitis and recurrent 
attacks of conjunctivitis due to the still lingering in 
their system of the after-effects of the poison from this 
gas" (Tr. 153). 

Every symptom here referred to was definitely prov- 
en as existing in France and prior to his departure from 
the war area back to the United States and his dis- 



96 United States of America 

charge, even to the extent of the bronchial pneumonia 
which followed the gas and which preceded the cough 
and the spitting up of blood and shortness of breath 
referred to, we find existing by the government's own 
record while in the Base Hospital in France and be- 
ginning October 25, 1918 (Tr. 93, 77), and the pneu- 
monia recurs practically every winter (Tr. 78). 

The symptoms as a basis for the medical experts' 
opinion were there. It is true that no one capable of 
designating the disability examined the plaintiff and 
found the disability by name as existing while in France 
but it is just as positively proven as though a man 
were in an accident and had his skull fractured but at 
the time of the accident the individual injured did not 
fully recognize the total disability and X-ray was not 
taken for thirty or sixty days or a year following, at 
which time discovery was made and a definite diag- 
nosis were made by one competent to designate the 
name of the disability and he then designated it as 
a skull fracture and based upon the knowledge of the 
injury and the history of the case attributed the skull 
fracture to the injury which occurred some time prev- 
iously. 

The government records and the plaintiff's testi- 
mony show the gas poisoning. The outward evidences 
of it remained with him throughout the years up to 
and at the time of the trial; the inward effects due to 
the inhalation of the gas were evidenced by the cough- 
ing, the loss of voice, the spitting of blood, the short- 
ness of breath and general weakness, the vomiting 
spells and the dizziness. These were noticeable to the 
extent that the layman observed them and testified as 



vs. Park Lusk 97 

to their existence in corroboration of the plaintiff's 
story, as early as the period when he was in the army 
in France and continuously from that time to the time 
of the trial. 

As to the incurability of this disease, let us first call 
attention to the statement of the government of the 
United States through the Commission by it appointed 
for investigation of these cases and its report in 1928 
wherein they stated : 

"They found a lot of these gas cases showed a 
decided organic residuum or condition remaining 
as the effect of gas poisoning and the most of 
them showed definite pathology of the pulmonary 
cavity; that these men were subject to recurrent 
bronchial attacks and repeated bronchitis. That 
if they had been severely or seriously enough 
gassed, they were found to have, on undue ex- 
posure or over-exertion or over-work, under ad- 
verse or irritating circumstances, they would be 
subject to recurrent attacks of broncho-pneumo- 
nia, bronchitis, and recurrent attacks of conjunc- 
tivitis, due to the still lingering in their system of 
the after-effects of the poison from this gas" (Tr. 
153). 

Dr. Kackley, speaking of the inhaling of the gas and 
its effects, stated **it would first destroy the mucous 
lining and if it got into the air cells in the lungs, it 
would destroy them (Tr. 108). * * * It is very 
destructive to the lungs. The first thing would be 
a congestion, a feeling of impending death, like you 
couldn't get your breath. The symptoms or indica- 



98 United States of America 

tions that can be observed by ordinary people are 
coughing, vomiting, the cough is probably one of the 
first. Any place the gas comes into contact with, the 
eyes, stomach or lungs, it will have an effect (Tr. 108). 
* * * The disease or diseases which follow within 
a week or two or three after gassing are the stomach 
is irritated, the eyes are very sore and the lungs seem 
like they are not able to get enough air in them. Pa- 
tients complain of lack of air. It seems like the air 
tubes are so congested that they are closed" (Tr. 109). 

Can there be any question from the recital of these 
symptoms, coupled with the diagnosis based upon them 
and with the evidence as to the permanent damage 
that there is any question as to the total permanent 
disability of this man following the inhalation of gas 
on or about October 10, 1918, and prior to his leaving 
the service and continuing throughout the years and 
that such disability was due to a disease designated 
by the physicians as bronchitis? What difference does 
it make as to the facts whether the individual him- 
self at the time he was gassed could or could not say 
that he had bronchitis or would have bronchitis or that 
he had the hope and faith looking to the future that 
he would overcome this disability evidenced by these 
symptoms which the ordinary layman could observe? 
As to the symptoms referred to being enumerated in 
the hypothetical question as a basis for the experts' 
opinion, we respectfully refer to the Transcript at 
pages 114, 115, 116, and elsewhere as appearing in the 
hypothetical question. 

At page 37 of appellant's brief they refer to some 
objections to testimony as set up in the Transcript at 



vs. Park Lusk 99 

page 37. It is a certain question and answer, it being 
addressed to the proposition that the man working 
with the appellee, in connection with the operation of 
a combine, would or would not know that plaintiff did 
all of his work, the objection being ''Objected to on 
the same ground," and referring back to the preceding 
objection, we find that it is based upon the ground 
that the witness stated ''the dust bothered him," that 
being said to be a conclusion and the witness, after 
explaining that he meant by the words "the dust 
bothered him" that it made him (appellee) cough and 
that it bothered "his eyes." These were certainly 
outward signs and symptoms which the layman could 
discover and have knowledge of and testify to, and so 
it was with the question of whether or not "he did do 
all his work" as it pertained to that particular task — 
that is operating or driving the team on the combine. 
There was nothing occult or mysterious about that; 
there is nothing requiring any unusual training. Here 
were two farmers operating what is known as a "com- 
bine" in harvesting grain and the question was: did 
one of them do the work assigned to him on that job? 
Certainly his associate could answer as a matter of 
fact and without the expression of an opinion or the 
giving of a conclusion that the appellee did or did not 
do the work. After devoting a whole page to this 
question and answer, at the bottom of page 37 of ap- 
pellant's brief, we find, "in the instant case we have 
a third party who evidently did not know what work 
the plaintiff was required to do, attempting to express 
a conclusion without any basis whatsoever therefor." 
True this was a third party but it was the fellow 



100 United States of America 

workman, the associate in the enterprise, the man on 
the combine with the appellee, each having certain 
duties to perform in connection with that work. 
Whether or not one of the men did or did not do the 
work assigned to him certainly is a question of fact 
which the other man could testify to. If not, pray 
who could? 

Again let us say that as to Assignment of Error III 
the overruling of the demurrer to plaintiff's complaint, 
while it still remains as an assignment of error, counsel 
has not seen fit to present any argument in support 
of their opinion and we assume they are no longer 
reljdng upon it. 

As to defendant's motion for a new trial set forth 
under Assignment II and the denial of motions for 
directed verdict as referred to in Assignment Errors of 
VIII and IX and the insufficiency of the evidence to 
support the verdict as set forth in Assignment X, they 
seem to rely upon their statement of facts, which are 
selected from the transcript of the record without their 
full context and thus are misleading as to the facts, 
and as to the other assignments of error we would say: 
III we have already discussed and contend that the 
fellow workman was certainly capable of testifying as 
to whether or not on that particular job the appellee 
did or did not do all of his work and certainly the Court 
did not err in permitting him to so testify. 

As to Assignment IV we would say that while the 
doctor was explaining the condition of the man's chest 
as he found it through examination and reading of the 
X-ray plates, plus the evidence of the gas burns upon 
the man's body, he stated that it would be helpful to 



vs. Park Lusk 101 

him in explanation of his testimony to illustrate that 
which he found and relative to which he was testifying 
and the plaintiff was allowed to remove his clothing 
in order that the physician might have the opportunity 
to do this and as we have elsewhere pointed out in 
this brief, it seems to be the universal practice sus- 
tained by the Courts in practically every state in the 
Union that in actions of this type it is permissible for 
the plaintiff to exhibit the injured part of his body to 
the jury and the objection that it is ''incompetent and 
prejudicial" was properly overruled by the Court. 

As to Assignment of Error V, which is the objection 
to the hypothetical question propounded to Dr. Kack- 
ley, which appellant has set forth as appearing at pages 
219 to 243 of the transcript of the record, it there appear- 
ing as set forth in their assignments of error and pur- 
porting to be the identical statement in the hypo- 
thetical question as propounded to Dr. Kackley begin- 
ning at the bottom of page 111 of the transcript and 
continuing to and concluded at the bottom of page 135 
of the transcript, we must go to page 124 of the tran- 
script in order to ascertain what the objection consists 
of and we there find: 

''Mr. Garvin: Object to that as incompetent, 
invading the province of the jury and not a sub- 
stantial statement of the facts." 

We do not, of course, know whether the objector 
had reference to the testimony as being incompetent 
or whether he objected to the incompetency of the 
witness to give such expert testimony. There is noth- 
ing specific or definite about the first part of the objec- 



102 United States of America 

tion. The next ground as to invading the province of 
the jury, there can only be one possible question there 
and that is as to the '"total" disability or the ''degree" 
of disability. Certainly there could be no objection 
to the testimony from one qualified to express an opin- 
ion as to whether or not such disability as the man 
suffered from was permanent and reasonably certain 
to remain with the afflicted individual throughout the 
remainder of his life. Neither could there be any 
objection to an opinion as to the cause of the disability, 
and as to the third subdivision or ground that the 
question was not a substantial statement of the facts, 
the objector failed to point out wherein it failed to 
present the facts or in what way it was not a substan- 
tial statement and such a general objection is not 
sufficient, and as we have pointed out under our points 
and authorities and cases there cited, it is not sufficient 
upon which to assign error or justify reversal and in 
addition to that, following the time of the making of 
that objection much additional testimony was added 
to the hypothetical question by way of assignment, 
and we must especially call attention to the fact that 
the objection as set forth at page 124 of the transcript 
is to the question as to whether or not the doctor has 
an opinion as to the permanent and total disability of 
the appellee. It must be borne in mind that it was 
not the question as to whether he was or was not totally 
disabled ; it was not the question as to permanency but 
it addressed itself solely to the question of whether or 
not the doctor had any opinion at all and then at page 
136 of the transcript we find, without objection of any 
kind, various questions and answers which show the 



vs. Park Lusk 103 

doctor's opinion that this man was totally and perma- 
nently disabled as a result of inhaling poison gas, and 
that that condition would remain with him throughout 
the remainder of his life. We emphasize the fact that 
there is no objection made to any of the four questions 
or answers there appearing. 

Assignment of Error VI is addressed to the examina- 
tion of Dr. C. P. Groom upon the hypothetical ques- 
tion, and there we find objection that the witness is 
not qualified (Tr. 155), and as to that, of course, it is 
entirely a matter of the discretion of the Court and 
we feel sure that a very hasty or a very careful exami- 
nation of the doctor's years of practice, his contact 
with patients suffering from gas poisoning as a result 
of the war, and his study of government reports as to 
this type of disease as disclosed at transcript pages 149, 
150, 151, 152, and 153 will show such evidence of 
qualifications as to justify the Court overruling the 
objection on that ground. The further ground of ob- 
jection is made that it invades the province of the 
jury, and as to that we have discussed it fully under 
the immediately preceding assignment of error and 
shall not repeat here but ask to embody the same 
reasoning to this. To the additional ground that the 
hypothetical question was not a substantial and fair 
statement of the facts we would but repeat that this 
is too general an obection to be a valid ground for 
reversal and the objector failed to show or present to 
the Trial Court wherein said question was not a sub- 
stantial or a fair statement of the facts. In addition 
to that we would respectfully call attention to the 
transcript of the record, from which it will be observed 



104 United States of America 

that the objection is entirely too late and is not ad- 
dressed to any question before the Court, was intro- 
duced at a time when there was no question pending, 
and was not presented in the nature of an objection to 
an answer to any question. 

Appellant in its Assignment of Error VI recites three 
questions and answers, each of the three questions 
being fully answered. There is no motion to strike any 
answer. The doctor is asked whether or not he has 
an opinion and he answers that he had. He is asked 
whether or not he has an opinion as to total perma- 
nent disability on or before May 1, 1919, and he 
answers ''yes," and then out of a clear sky, and with- 
out the pendency of any question, an objection is 
interposed to something. This objection is overruled 
and then follow three other questions and answers 
which relate to the diagnosis of chronic bronchitis, 
chronic gastro intestinal disturbances, chronic conjimc- 
tivitis, and chronic laryngitis, all due to gas poisoning 
appellee had received in the army. We find no objec- 
tion to any of those questions. 

Then we find the Assignment of Error VII going to 
one certain question as follows: 

''Q. You have stated that you have an opinion 
as to his total permanent disability preceding 
May 8, 1918; what was that opinion?" 

And to that question an objection was made, first 
on the ground of the witness not being qualified to 
answer, and this we have already discussed in connec- 
tion with the Assignment of Error VI, as we have also 
in Assignments V and VII discussed the invasion of 



vs. Park Lusk 105 

the province of the jury. Then we have again the 
ground of objection that the hypothetical question did 
not give a fair and substantial statement of facts. 
This objection is overruled and he gives answer to that 
question : then follows an entirely different question as 
to, "has he been disabled totally and permanently from 
that date to the present time," and that is answered 
without objection and then follows the question and 
answer that the disability will remain throughout the 
remainder of this man's life and is and has been perma- 
nent, and to these questions and answers there are either 
no objections or there is no assignment of error. 

Because of so many excerpts of the testimony set up 
in such separation from the context as to fail to dis- 
close the true facts and because of the unusual record 
relative to assignments of error, we have devoted a 
considerable portion of this argument or discussion to 
those matters appearing in appellant's brief, but we 
feel impelled to add these additional thoughts: 

The plaintiff was gassed in actual warfare, receiving 
outward biirns and inhaling the gas, causing vomiting 
and weakness and such illness as to require hospitaliza- 
tion within four days and requiring transfer from field 
hospital to base hospital; stomach irritations set in; 
diarrhea developed and within a week, or to be exact 
by October 25, 1918, he developed bronchial pneumo- 
nia; was under treatment with the usual course of 
treatment for poison gas victims as treated at that 
time, to-wit: alcohol and water three times a day and 
castor oil. After approximately nine weeks of this 
treatment, he was released from the hospital for the 
purpose of rejoining his company and going home, the 



106 United States of America 

Armistice having been signed. He was too weak to 
do, nor did he perform any of the duties with his 
company, such as drilhng or the ordinary soldierly 
duties. He had developed pains in his chest, the spit- 
ting of blood, severe coughing spells, the loss of his 
voice, the pains in his stomach, and the diarrhea con- 
dition; the eyes were bloodshot and watery and he 
had all of the symptoms which were the symptoms of 
one who had developed bronchitis, resulting from the 
inhaling of gas and they have remained with him from 
that day to the present and without any additional or 
changed condition. The symptoms and the pain and 
suffering have been one and the same from the time 
he inhaled the gas to the time of the trial. After he 
came home, the home remedies of his family were 
applied by his wife, sister-in-law and others, such as 
the mustard plaster for the pains in his chest and the 
castor oil for constipation, etc., and throughout the 
years very seldom did he partake of any food of an 
evening other than bread and milk for the evening 
meal. There was a continuation of the taking of 
alcohol diluted in water for the relief of the choking 
sensation and pains. Any physical exertion brought 
on the griping pains in the chest, dizzy spells, fainting, 
coughing; the coughing and vomiting followed any 
work in dust; followed meals, especially breakfast. 

Certainly in this record there can be no question but 
what the same identical disease, the same identical 
symptoms, the same identical disabilities, pain and 
suffering continued throughout the years. 

As to the work record we attorneys and others who 
may not be accustomed to farm life, even though some 



vs. Park Lusk 107 

of us have been raised in that atmosphere, should not 
lose sight of the distinction between a farmer and a 
citizen who resides on a farm, and too often assume 
that because a man with his wife and children, or with 
other relatives, continues to make his home on a farm 
that the mere residence is evidence of the earning of 
a living or the making of a living for himself and by 
his effort. Here we have what is in Idaho known as 
a *'dry farm" and the writer of this brief, who hap- 
pened to reside in an irrigated section of the state, was 
startled to learn the real distinction between ''farming" 
and ** dry farming," when inspecting the home and inter- 
viewing the witnesses in connection with this case. 
As shown by the testimony in this case, there is only 
a portion of the farm put into a grain crop each year — 
no other crops are raised other than wheat; they sum- 
mer fallow it, one year, if moisture enough develops 
they raise some grain on part of the ground, the bal- 
ance lying idle for next year's crop and the course of 
labor is very carefully set up in the testimony, starting 
out with the early spring work, then fixing fences for 
about a day, summer fallowing, plowing, harrowing, 
then some years there are weeds to pull and cut, then 
harvesting, then drilling, and then ''canyon work," 
which means a few days bringing in wood from the 
canyons, and a review of the statement of facts as 
presented in this brief and the description of the record 
will show that this man was unable to do any of this 
work, other than very spasmodically. His brother or 
a hired man or his wife or children would year after 
year and every year be called upon to complete the 
various tasks. Time and again he would go into the 



108 United States of America 

field only to turn back from his work with the require- 
ment of another to complete the task. At other times 
his condition was so poor that he could not even start 
out into the field; he couldn't milk the cows, do the 
ordinary chores without the dizzy spells, the vomit- 
ing. His wife, sister-in-law and others would have to 
complete that task. He could not chop the wood; he 
could not raise a sack of grain to put it into the drill; 
he could not harrow at all because of the dust, and 
the record is replete with the spirit of a man who 
would never give up, who tried day after day, month 
after month and throughout the years, but was never 
able to do the work or any reasonable or substantial 
portion of it. At one time he was bold enough to say 
that he made a fair living but it was not as a result of 
his efforts. It was by reason of the assistance from his 
family, other relatives and friends. 

Let us say just a word or two as to the appellant's 
witnesses in attempt to break down the appellee's state- 
ment of facts as to the work record. Clark Cameron 
(Tr. 166-167), a witness on behalf of the defendant, 
on direct examination inferred that he had observed 
the farm operations of the appellee over a period of four 
or five years. Under cross examination it developed that 
the longest time he had ever observed such operations 
was a period of one hour and this was during a period 
of seven or eight times that he had been at the ranch. 

The witness M. V. Tallon (Tr. 167-168), who had 
known Park Lusk since the fall of 1914, and who had 
testified that he had been at the appellee's farm every 
summer off and on since 1927, during the plowing 
season and during the harvest season, under cross- 



vs. Park Lusk 109 

examination stated that he helped assemble the com- 
bine and start it in operation and thinks he was there 
most of that day. "I was there until the combine was 
running satisfactorily. Other than that time I simply 
went out there with repairs and for collections or mat- 
ters that required being there a very short time. Us- 
ually when I went out the machine was not in operation 
and I didn't wait to see it get into operation." 

Mr. Claude Bistline (Tr. 169-170), another witness, 
had sold Mr. Lusk some farm machinery — a gang plow 
and a second hand combine and a second hand mower, 
and saw Mr. Lusk on his place once or twice a year for 
probably four or five years, and that was during the 
harvest time. ''I don't believe I can remember seeing 
him at work. Harvest would be going on and the com- 
bine would be running. I have hired him to run 
a combine. I was not there when he was running it." 

Such was the testimony of the defense to establish 
a work record. 

In addition to this lay testimony put on by the 
defendant, we have the direct testimony of Dr. Sprague, 
who goes so far as to deny the existence of everything 
the plaintiff said to him as to his condition, he claimx- 
ing he could find no pathology for it and in order to 
measure the value of his testimony we might but quote 
from the record: *'I found no evidence of gastro 
intestinal poisoning from gas. There is no such thing. 
There is no such thing as gas poisoning" (Tr. 176), and 
the further statement: ''My opinion is that it is largely 
an imaginative symptom" (Tr. 174). 

Then we have the defendant's doctor, P. J. Germon, 
who admits Mr. Lusk "had chronic constipation. He 



110 United States of America 

gave it to me as chronic and I accepted his word for 
his history. It is not unusual to have diarrhea and con- 
stipation alternately, and he made that statement to 
me. I have no reason to dispute his word. The man 
came to me and I found constipation" (Tr. 191). '*In 
gas burning there would be some local irritation, what- 
ever it is, in the eyes and all through the skin will 
show some irritation. Watering of the eyes is Nature's 
way of allaying the inflammation" (Tr. 192). This 
doctor admits, referring to plaintiff's exhibit No. 11, 
''this could be called mild bronchitis, a mild from — a 
minor form" (Tr. 183), and he admits further that if 
it is true that if the plaintiff's history is true to the 
effect that he had trouble working in dust and a closed 
room, it would make a difference as to his opinion of 
the disability, and that if it were true he was in the 
poison gas area on October 12, 1918, without a mask 
and immediately thereafter had pain in his eyes with 
water running from the nose and sneezing, attacks of 
pain in the stomach followed by vomiting, followed by 
diarrhea, which resulted in bronchial penumonia by 
October 25, he would have to qualify his answer. It 
would merely not change his answer as to his own 
physical findings and pathology, but with that history 
he would change his opinion (Tr. 194), and we further 
find Dr. Germon stating, "I do not agree with Dr. 
Sprague that this (Park Lusk's) patient's trouble is 
imaginary (Tr. 193-194). 

The only other testimony presented by the defend- 
ant was that of Dr. Riggs, and his examination of the 
plaintiff was limited strictly to that of a surgical 
examination, making one examination and that "lim- 



vs. Park Lush 111 

ited to the stomach and feet" (Tr. 190). Certainly 
upon this record the defendant was not entitled to a 
directed verdict upon any ground other than absolute 
failure of proof on the part of the plaintiff. 

In conclusion we very humbly, nevertheless seriously, 
ask a careful analysis of the record relating to the 
opinion evidence, which we believe is the only possible 
weakness (and that based solely upon this Court's 
recent ruling in relation to opinion evidence in this 
type of cases), in the case as presented in the Trial 
Court, and we contend that it was necessary for that 
history and that hypothetical question to be presented 
for the purpose of showing the nature of the disability, 
the cause of the disability, its actual existence prior 
to a certain definite date, in this case the date of the 
expiration of the policy and its permanency, and if 
there was any mistake at all it is only as to the ques- 
tion of the totality of the disability under rule 11, as 
embodied in the contract, and as to this we would add 
that this definition is a part of the contract, made so 
by regulations authorized to be made a part of the 
policy by Congressional act and was stipulated as the 
proper definition for both total and permanent dis- 
ability in this case, and further both parties to the 
action used the identical definition and showed from 
their medical witnesses the same opinion evidence as 
to whether or not the appellee was totally disabled 
under that definition. There was a conflict of testi- 
mony in the record, three doctors testifying that the 
man was not totally disabled and two testifying that 
he was, and the jury chose from among them, weighing 
the qualifications, their experience and the facts upon 



112 United States of America 

which they based their opinion all under proper full 
and complete instructions from the Court as to the 
weight that should be given to such testimony. In 
view of these facts and this record, we very earnestly 
urge an affirmation of the judgment in this case. 

Dated at Boise, Idaho, this 12th day of February, 
1935. 

Respectfully submitted, 

B. W. OPPENHEIM, 
J. M. LAMPERT, 
J. B. MUSSER, 

Attorneys for the Appellee, 
Residing at Boise, Idaho. 

Service of the foregoing, by copy, acknowledged this 
day of , 1935. 



Attorneys for Appellant. 



No. 7462 



?inttet> States; 

Circuit Court of ^ppealsi 

Jfor tfie i^intf) €iumt a 



FIRST NATIONAL BANK OF DILLON, 
MONTANA, 

Petitioner, 

vs. 

COMMISSIONER OF INTERNAL REVENUE, 

Respondent. 



©ra«0rnpt of tlj^ ^ttavh 



Upon Petition to Review an Order of the United States 
Board of Tax Appeals. 

FILED 

MAY 1 9 1934 

PAUL P. O'BRIEN. 

PARKER PRINTiNO COMPANY, 549 SANSOME VMEttXsAN FRANCISCO 



No. 7462 



^nttetr States! 

Circuit Court ot Appeals; 



Jfor tfje jBtintfi Circuit. 



FIRST NATIONAL BANK OF DILLON, 
MONTANA, 

Petitioner, 

vs. 

COMMISSIONER OF INTERNAL REVENUE, 

Respondent. 



©ranarnpt nf tlj? Uprnrli 



Upon Petition to Review an Order of the United States 
Board of Tax Appeals. 



PARKER PRINTING COMPANY. 545 SANBOME STREET. SAN FRANCISCO 



INDEX 

[Clerk's Note: When deemed likely to be of an important nature, 
errors or doubtful matters appearing in the original certified record are 
printed literally in italic; and, likewise, cancelled matter appearing in 
the original certified record is printed and cancelled herein accordingly. 
When possible, an omission from the text is indicated by printing in 
italic the two words between which the omission seems to occur.] 

Page 
Appearances 1 

Amended Petition and Consent Thereto 13 

Answer to Amended Petition 25 

Certificate and Seal 63 

Decision Entered Nov. 17, 1933 32 

Docket Entries 1 

Memorandum Opinion 27 

Notice of Appeal 40 

Order Approving Statement of Evidence 61 

Order Entered Nov. 22, 1933 33 

Petition 3 

Petition for Review with Notice of Filing 34 

Praecipe - 61 

Statement of Evidence 42 

Testimony for Petitioner 
Gilbert, J. H. 

— direct — 42 

— recalled, direct 52 

— cross 60 

Mactavish, F. R. 

—direct 47 



APPEARANCES 

For Taxpayer: 

P. J. COFFEY, Esq., 
PETER S. RASK, Esq. 

For Commissioner: 

J. M. LEINENKUGEL, Esq. 



Docket No. 61892 

FIRST NATIONAL BANK OF DILLON, 
MONTANA, 

Petitioner, 

V. 

COMMISSIONER OF INTERNAL REVENUE, 

Respondent. 

DOCKET ENTRIES 
1932 

Feb. 12 — Petition received and filed. Taxpayer no- 
tified. (Fee paid.) 
" 13 — Copy of petition served on General Conn- 
sel. 
Mar. 10 — Answer filed by G. C. 
" 15 — Copy of answer served on taxpayer. Gen- 
eral calendar. 
Sept. 1 — Motion for circnit hearing at Minneapolis 
or St. Panl filed by taxpayer. 9-3-32 
Granted. 
Nov. 28— Amended petition filed. 11-28-32 Copy 
served on G. C. 



2 First Xatl Baul- of Billon 

1933 

Jan. 10 — Answer to amended petition filed by G. C. 

1-17-33 Copy served. 
June 1 — Hearing set beginning July 10, 1933 in St. 

Paul, Minn. 
July 12 — Hearing had before Mr. Lansdon on mer- 
its. Submitted. Briefs due in 60 days. 
Called from calendar July 10, 1933. 
*' 22— Transcript of hearing of July 12, 1933 
filed. 
Aug. 31 — Brief filed by taxpayer. 
Sept. 9— Motion for extension to 9-21-33 to file 
brief— filed by G. C. 9-11-33 Granted. 
'* 21 — Brief filed by General Counsel. 
Nov. 14 — Memorandum opinion rendered, Mr. 
Lansdon, Div. 8. Decision will be entered 
for the respondent. 
*' 17 — Decision entered — W. C. Lansdon, No. 8. 
'' 22— Order that decision of 11-17-33 be cor- 
rected entered — W. C. Lansdon Div. 8. 
1934 

Feb. 5 — Petition for review by U. S. Cir. Ct. of 
Appeals, 9th Circuit with assignments of 
error filed by taxpayer. 
" — Proof of service filed taxpayer. 
*' 5 — Statement of evidence lodged. 
*' 5 — Proof of service of statement of evidence 

and set for hearing Feb. 19, 1934. 
*< 7— Hearing date changed to Feb. 21, 1934. 
** 12 — Motion to allow & approve above statement 
filed by taxpayer. 



vs. Coinniissioncr of Int. Bet\ 3 

1934 

Feb. 15 — Objections to proposed statement of evi- 
dence, filed by G. C. 

*' 21 — Hearing had before Mr. Trammell on ap- 
proval of statement of evidence Approved. 

*' 21 — Order that statement of evidence lodged 
2-5-34 be approved and ordered filed en- 
tered. 

" 26 — Proof of service of objections to statement 
of evidence filed by G. C. [1*] 
Mar. 12 — Praecipe with proof of service thereon 
filed by taxpayer. 

'' 24 — Motion for extension to 4-30-34 to prepare 
and transmit record filed by taxpayer. 

" 24 — Order enlarging time to 4-30-34 for trans- 
mission and delivery of record entered. 
[2] 



United States Board of Tax Appeals 
Docket No. 61892 
Appeal of 
First National Bank, 
Dillon, Montana 

PETITION 

The above-named taxpayer hereby appeals from 
the determination of the Commissioner of Internal 



Page nunibeiiug .Tppeaiing at the foot of page of originnl certified 
Transfript of Record. 



4 First Xat'J Bank of Dillon 

Revenue as set forth in liis deficiency letter 
IT:AR:E-3FCC, dated December 18, 1931, and as a 
basis of its appeal sets forth the following : 

1. The taxpayer is a corporation organized under 
the laws of the United States with principal offices 
at Dillon, Montana. 

2. The deficiency letter (a copy of which is at- 
tached) was mailed to the taxpayer on December 18, 
1931. 

3. The taxes in controversy are income taxes for 
the year 1929 and are less than $10,000.00, to wit, 
Eight Thousand Three Hundred and Sixty-three 
One Hundredths Dollars. 

4. The determination of tax contained in the 
said deficiency letter is based upon the following 
error : 

(a) The Commissioner of Internal Revenue 
has erroneously disallowed ])ad debts on 
losses in the sum of $76,825.00. 

5. The facts upon which the taxpayer relies as 
the basis of its appeal are as follows : [3] 

(a) On December 31, 1929, this taxpayer pos- 
sessed, in addition to the assets shown on 
the books of the bank, certain other assets 
owned by the bank which were carried in 
accounts designated "Stockholder's Fund." 
On December 31, 1929 said "Account" or 
"Fund" was credited with earned interest 
received in tlie sum of $3,569.06. On De- 



vs. Commissioner of Int. Rev. 5 

cember 31, 1929 said "Account" or "Fund" 
was charged $76,825.00, such amount rep- 
resentmg notes ascertained to be worth- 
less. 

(b) On February 17, 1931, Internal Revenue 
Agent Robert L. Hamniil rendered a Re- 
port of his examination of the said "Stock- 
holder's Fund" or "Stockholder's Ac- 
count" of the First National Bank of Dil- 
lon, for the year 1929, the said Revenue 
Agent treating said "Account" or "Fund" 
as "An Association". The said Report dis- 
closed a net loss as shown by the books in 
the sum of $73,255.94; and a taxable net 
loss for the year 1929 or $73,255.94. 

(c) That on the twelfth day of November 1929, 
the Northwest Bancorporation of Minneap- 
olis, Miimesota, purchased all of the out- 
standing stock of the First National Bank 
of Dillon, Montana, with the exception of 
certain qiuilifying shares. 

(d) That the Northwest Bancorporation ex- 
changed 17,500 shares of its stock for the 
2,000 shares of stock of the First National 
Bank of Dillon, Montana. That the mar- 
ket value of the Northwest Bancorporation 
stock so exchanged was $1,215,000.00, and 
that the book value of the assets of the 
First National Bank of Dillon amounted 
to $678,654.31. That the book value of the 



6 First Xat'J Bank of Dillon 

said "Stockholder's Fund" or ''Stockhold- 
er's Account" amounted to $261,934.11. 

(e) That under the terms of the agreement 
whereby the Northwest Bancorporation 
purchased the First National Bank of Dil- 
lon, Montana, the assets owned by or car- 
ried in the said "Stockholder's Fund" 
were to become the assets of the First Na- 
tional Bank of Dillon. 

(f) That on December 31, 1929 the Northwest 
Bancorporation had title to 1,830 shares 
out of the 2,000 outstanding shares of stock 
of the First National Bank of Dillon, Mon- 
tana. [4] 

(g) That on December 31, 1929 the said 
"Stockholder's Account" was the property 
of the First National Bank of Dillon, and 
was owned by the First National Bank of 
Dillon. That on said date all of the assets 
carried in said "Stockholder's Account" or 
"Fund" was the assets of this taxpayer. 

6. The taxpayer, in support of its appeal, relies 
upon the following proposition of law : 

(a) Debts ascertained to be worthless and 
charged off within the taxable year (or, in 
the discretion of the Commissioner, a reas- 
onable addition to a reserve for bad debts) ; 
and when satisfied that a debt is recover- 
able only in part, the Commissioner may 
allow such debt to be charged off in part. 



vs. Commissioner of Int. Rev. 7 

WHEREFORE, the taxpayer respectfully prays 
that this Board may hear and determine its appeal. 

P. J. COFFEY 
For the Taxpayer. 
P. J. Coffey 

Northwestern Bank Building 
Minneapolis, Minnesota [5] 

State of Montana 

County of Beaverhead — ss: 

J. H. GILBERT, being first duly sworn, says that 
he is the President of the above-named taxpayer, 
and as such is duly authorized to verify the forego- 
ing petition; that he has read the same petition or 
had the same read to him, and is familiar with the 
statements therein contained, and that the facts 
therein stated are true, except such facts as are 
stated to be upon information and belief, and those 
facts he believes to be true. 

J. H. GILBERT 

Sworn to before me this 9th day of February, 
1932 
[Seal] H. K. BULGER 

Notary Public 

My commission expires Feb. 11, 1933 [6] 



8 First Xatl Bank of Dillon 

(COPY) 
IT:AR:E-3 
FCC-60D 

First National Bank December 18, 1931 

Dillon, Montana 
Sirs: 

You arc advised that the determination of your 
tax lial)ility for the ycar(s) 1928 and 1929 discloses 
a deficiency of $8,380.21, as shown in the statement 
attached. 

In accordance with section 272 of the Revenue 
Act of 1928, notice is hereby given of the deficiency 
mentioned. Within sixty days (not counting Sun- 
day as the sixtieth day) from the date of the mailing 
of this letter, you may petition the United States 
Board of Tax Appeals for a redetermination of 
your tax liability. 

HOWEVER, IF YOU DO NOT DESIRE TO 
PETITION, you are requested to execute the en- 
closed agreement form and forward it to the Com- 
missioner of Internal Revenue, Washington, D. C, 
for the attention of IT:C:P-7. The signing of this 
agreement will expedite tlie closing of your re- 
turn (s) by permitting an early assessment of any 
deficiency and preventing the accumulation of in- 
terest charges, since the interest period terminates 
thirty days after filing the enclosed agreement, 
or on the date assessment is made, whichever is ear- 
lier; WHEREAS IF NO AGREEMENT IS 



vs. Commissioner of Int. Rev. 



9 



FILED, interest will accumulate to the date of 
assessment of the deficiency. 

Respectfully, 

DAVID BURNET 

Commissioner 
By (Signed) J. C. Wilmer 
Deputy Commissioner. 
Enclosures : 
Statement 
Form 882 
Form 870. 
iy-3 [7] 



STATEMENT 



IT:AR:E-3 
FCC-60D 



Years 

1928 

1929 

Totals 



In re: First National Bank, 

Dillon Montana 

Tax Liability 

Tax Liability Tax Assessed Deficiency 

$ 217.84 $138.26 $ 79.58 

8,436.36 135.73 8,300.63 



$8,654.20 



$273.99 



$8,380.21 



Careful consideration has been accorded your pro- 
tests dated April 14, 1931 and June 5, 1931, in con- 
nection with the findings of the examining officer, 
and the information submitted at a conference held 
in this office. The results of the consideration of 
your protests are contained in the attached state- 



10 First Xat'l Bank of Dillon 

nieiit, which sets forth fully the position of the Bu- 
reau in connection with your contentions. 

1928 
Net Income 

Net income as disclosed by 

return $4,152.17 

As corrected 4,815.36 



Net adjustment $ 663.19 

Unallowable deductions and 
additional income: 

(a) Donations $ 79.00 

(b) Profit on sale of 
equipment 300.00 

(c) Excessive depreciation 284.19 



Total $ 663.19 

Explanation of Items 

(a) Donations are not allowable deductions from 
gross income. 

(b) Burroughs adding machine, fully depreci- 
ated, Avas sold in 1928 for $300.00. 

((') Depreciation deducted $2,548.78 

Depreciation allowed 2,264.59 



Amount disallowed $ 284.19 

[8] 



vs. Commissioner of Int. Rev. 11 

Details of the amount of depreciation allowed are 
shown in exhibit E of the revenue agent's report for 
1928. 

Computation of Tax 
Income Tax 

Net income for taxable year $4,815.36 

Less: 

Credit 3,000.00 



Balance subject to tax 

Income tax 12% 

Total previously assessed 


$1,815.36 

$ 217.84 

L38.26 


Additional tax to be assessed 

1929 
Net Income 

Net income as disclosed by return 
As corrected 


$ 79.58 

$4,233.96 
76,694.19 



Net adjustment $72,460.23 

Unallowable deductions and 
additional income : 



(a) Nontaxable income 


$200.00 




(b) Donations 


156.00 




(c) Loss on stockholder's 






account 


73,255.94 




Total 




$73,611.94 


Nontaxable income and additional 




deduction : 






(d) Depreciation 




1,151.71 



Net adjustment as above $72,460.23 



12 First Xatl Baul' of Dillon 

Explanation of Items 

(a) Interest on bonds of the Andrus Hotel Co. 
Avas included in nontaxable income. 

ly-3 [9] 

(b) Donations arc not allowable deductions from 
gross income. 

(c) Loss on stockholder's account is not allowable 
as a deduction. This office holds that it has not been 
shown that the assets listed in the stockholder's 
account were the property of the bank, or, if the}^ 
were, at what value they were transferred to the 
bank. It is held that many of these assets were 
worthless when the Bancorporation purchased the 
stock of the bank, and the loss properly falls upon 
the stockholders rather tlian upon the bank. 

(d) The deduction for depreciation is adjusted 
as shown in exhibit E of the revenue agent's re]3ort. 

Depreciation allowed $2,027.18 

Depreciation deducted 875.47 



Additional allowance $1,151.71 

Computation of Tax 
Income Tax 

Net income for taxable year $76,694.19 

Income tax 11% $ 8,436.36 

Total previously assessed 135.73 



Additional tax to be assessed $ 8,300.63 



vs. Commissioner of Int. Rev. 13 

Consent which will expire December 31, 1931, ex- 
cept as extended by the provisions of section 277 of 
the Revenue Act of 1928, is on file for the year 1928. 

ly-3 

[Endorsed]: United States Board of Tax Ap- 
peals. Filed Feb. 12, 1932. [10] 



[Title of Court and Cause.] 

AMENDED PETITION 

The above named taxpayer hereby appeals from 
the determination of the Commissioner of Internal 
Revenue as set forth in his deficiency letter IT : AR : 
E-3FCC, dated December 18, 1931, and as a basis of 
its appeal sets forth the following: 

1. The taxpayer is a corporation organized under 
the laws of the United States, with principal offices 
at Dillon, Montana. 

2. The deficiency letter, a copy of which is at- 
tached hereto, marked Exhibit A, was mailed to the 
taxpayer on December 18, 1931. 

3. The taxes in controversy are income taxes for 
the year 1929, and are less than $10,000.00, to-wit: 
Eight Thousand Three Hundred and Sixty-three one 
hundredths ($8,300.63) Dollars. 

4. The determination of tax contained in the said 
deficiency letter is based upon the following errors : 

(a) The Commissioner of Internal Revenue has 
erroneously disallowed bad debts or losses 



14 First Xatl Banl' of DiJJou 

[11] in the sum of $70,294.88, or nhiety-oiie 
and one-half per cent of $76,825.00. 
(b) The Commissioner of Internal Eevenue erred 
in failing to allow your petitioner and 
"Stockholder's Account", an Association, to 
hie a consolidated Income Tax Return for 
the taxable year 1929. 

5. The facts upon which the taxpayer relies as a 
basis of its appeal are as follows : 

(a) That on or about the 8th day of January, 
1912, the Board of Directors of Petitioner 
herein duly and regularly passed a Resolu- 
tion as follows: 

"It is further ordered that a Special Divi- 
dend of Fifty Thousand Dollars be and the 
same is hereby declared payable forthwith, 
the same to be credited to and carried on the 
Books of the Bank in Individual balances 
as a Stockholders account each Stockholder 
to have an interest therein in proportion to 
the amount of stock held and owned by each 
and to be used under the direction of the 
officers and directors of the Bank as tlieir 
judgment may dictate. 

"The officers are hereby directed to carry 

this order into effect but this order shall be 

^ subject to the approval and ratification of 

the Stockholders when duly assembled at 

i their annual meeting in January, 1912". [12] 

■?•- That on or about January 9th, 1912, at the 

regular annual meeting of the stockholders 



vs. Commissioner of Int. Rev. 15 

of Petitioner herein, the follwing Resolution 
was duly passed: 

"Resolved: That the action of the Board 
of Directors of this Bank heretofore taken, 
declaring a special dividend of Fifty Thou- 
sand Dollars, same to be credited to and car- 
ried on the books of the ])ank among the 
individual balances, and designated as a 
' Stockholder 's Account ', to be used under the 
direction of the officers of the bank as in their 
judgment may be for the best interest of the 
stockholders, be, and the same is hereby con- 
firmed, approved and ratified. 

"It is further hereby Resolved by the 
stockholders of this Bank, all being present 
and voting hereon, That the Board of Direc- 
tors be and they are hereby empowered and 
duly authorized to make and declare further 
Special Dividends of the same character and 
for the same use as above set forth, when, in 
their judgment it shall be for the best inter- 
ests of the stockholders hereof/' 
That the Resolutions of the Board of Direc- 
tors and Stockholders were effected and said 
"Stockholder's Account" was managed and 
conducted by Directors and Officers of Peti- 
tioner, 
(b) That thereafter, the said "Stockholder's Ac- 
count" was increased from time to time by 
further Special Dividends and earnings. That 
on December 31st, 1929, the balance in said 



16 First Xatl Bank of Dillon 

[13] "Stockholder's Account" was $261,934.11. 
That said balance in said account was repre- 
sented by various assets carried at cost in the 
assets of your Petitioner. 

(c) That from and after the year 1912, the In- 
come Tax Return of the said "Stockholder's 
Accoimt" was consolidated with the Income 
Tax Return of your Petitioner herein. That 
the said "Stockholder's Account" was treated 
and considered, for tax jmrposes, as "An As- 
sociation" by the Respondent. 

(d) That your Petitioner herein and "Stockhold- 
er's Account" elected, for the taxable year 
1929, to tile a consolidated return of Income 
Tax. That Ros])ondent refused to permit Peti- 
tioner and "Stockholder's Account" to return 
their 1929 income on a consolidated basis. 

(e) That on the 12th day of November, 1929, by 
an Instrument in writing, the Northwest Ban- 
corporation, a Delaware Corporation, with 
[14] its principal offices in Minneapolis, Min- 
nesota, agTeed to purchas, and did purchase 
the stock of the Petitioner, First National 
Bank of Dillon, Montana. Tliat on December 
31st, 1929, the said Northwest Bancorpora- 
tion, under the terms of its agreement to pur- 
chase, had purchased and owned 1,830 sliares 
of the 2,000 shares of the stock outstandiujg 
of the First National Bank of Dillon, Mon- 
tana. 

(f) That under the terms of the contract to ])ur- 
chase, the stock of Petitioner herein, it was 



vs. Commissioner of Int. Rev. 17 

agreed by and between the stockholders of 
Petitioner and the Northwest Bancorpora- 
tion that tlie ''Stockholder's Account" afore- 
said shall become assets of the First National 
Bank of Dillon. That the "Stockholder's 
Account" aforesaid became an asset and 
property of Petitioner herein, and was, to the 
extent of 91.5 per cent of said "Stockhokler's 
Account", the property of Petitioner on the 
31st day of December, 1929. 

(g) That the assets of said "Stockholder's Ac- 
coimt" [15] were transferred to Petitioner 
at the same value as carried by the Bank, or 
cost, or at $261,934.11. 

(h) That in accordance with the terms of afore- 
said contract, the stock of Petitioner and 
"Stockholder's Account" were purchased on 
the following basis: The Northwest Ban- 
corporation exchanged eight and three- 
fourths (8 3/4) shares of its stock, having 
a market value of $70.00 per share, for one 
share of Petitioner's stock, having no mar- 
ket value, plus each share's proportionate 
interest in "Stockholder's Account"; that the 
then book value of Petitioner's stock was 
$241.02 per share, and the book value of each 
proportionate interest in "Stockholder's Ac- 
count", as represented by one share of Peti- 
tioner's stock, was $130.97. 

(i) That on December 31st, 1929, the Officers 
and Directors of vour Petitioner ascertained 



18 First XaH Bank of DiUon 

to be worthless, debts owing to it and "Stock- 
holder's Account", in the amount of $76,- 
825.00, [16] and on December 31st, 1929, 
the said debts ascertained to be worthless, in 
the amount of $76,825.00, were charged off. 

WHEREFORE, your Petitioner prays that this 
Board may hear the proceedings and determine : 

(a) That the Income Tax Return of your Peti- 
tioner herein, and that of the ''Stockholder's 
Account", for the year, 1929, shall be con- 
solidated. 

(b) That Petitioner sustained losses by reason 
of bad debts ascertained to be worthless, and 
charged off within the taxable year 1929, in 
the amount of ninety-one and five-one hun- 
dredths (911/2) per cent of $76,825.00, or 
$70,294.88, and that your Petitioner was en- 
titled to a deduction from gross income for 
the taxable year 1929 in the amount of $70,- 
294.88. 

FIRST NATIONAL BANK 

Dillon, Montana 
By J. H. GILBERT 
President 
P. J. (^OFFEY, 

Attorney for Petitioner 

1043 Northwestern Bank Building 
Minneapolis, Minnesota. [17] 



vs. Commissioner of Int. Rev. 19 

State of Montana 

Count}' of Beaverhead — ss. 

J. H. Gilbert, being first duly sworn, says that 
he is the President of the above named taxpayer, 
and as such is duly authorized to verify the fore- 
going Amended Petition; That he has read the 
same Amended Petition, or had the same read to 
him, and is familiar with the statements therein 
contained, and that the facts therein stated are true, 
except such facts as are stated to be upon informa- 
tion and belief, and those facts he believes to be 
true. 

J. H. GILBERT 
President. 

Subscribed and sworn to before me this 7t1i day 
of November, 1932. 

[Seal] H. K. BULGER 

Notary Public for the State of Montana, residing 
at Dillon, Montana. My Commission expires 
Feb. 11, 1933. [18] 



* NP— 2-26 

EXHIBIT A. 

Dec. 18 1931 
IT:AR:E-3 
FCC-60D 

First National Bank, 
Dillon, Montana. 
Sirs : 

You are advised that the determination of your 
tax liability for the year(s) 1928 and 1929 dis- 



20 First Xafl Bank of Dillon 

closes a deficiency of $8,380.21, as sliown in the 
statement attached. 

In accordance with section 272 of the Revenue 
Act of 1928, notice is hereby given of the deficiency 
mentioned. Within sixty days (not counting Sun- 
day as the sixtieth day) from tlie date of the mail- 
ing of this letter, you may petition the United 
States Board of Tax Appeals for a redetermination 
of your tax liability. 

HOWEVEE, IF YOU DO NOT DESIRE TO 
PETITION, you are requested to execute the en- 
closed agreement form and forward it to the Com- 
missioner of Internal Revenue, Washington, D. C, 
for the attention of IT:C:P-7. The signing of this 
agreement will expedite the closing of your re- 
turn(s) ])y permitting an early assessment of any 
deficiency and preventing the accumulation of in- 
terest charges, since the interest period terminates 
thirty days after filing the enclosed agreement, or 
on the date assessment is made, whichever is earlier ; 
WHEREAS IF NO AGREEMENT IS FILED, 
INTEREST will accumulate to the date of assess- 
ment of the deficiency. 

Respectfully, 

DAVID BURNET, 
Comnussioner. 
By (Signed) J. (\ Wilmcr 
Enclosures: Deputy Commissioner. 

Statement 
Form 882 
Form 870 
!>•-:> [Hi] 



vs. C ommissioner of Int. Rev. 21 

STATEMENT 



IT :AR :E-3 




FCC-60D 


In re: First National Bank, 

Dillon, Montana. 

Tax Liability 

Tax Tax 




Years 


Liability Assessed 


Deficiency 


1928 


$ 217.84 $138.26 


$ 79.58 


1929 


8,436.36 135.73 


8,300.63 



Totals $8,654.20 $273.99 $8,380.21 

Careful consideration has been accorded your 
protests dated April 14, 1931 and June 5, 1931, in 
connection with the findings of the examining of- 
ficer, and the information submitted at a confer- 
ence held in this office. The results of the con- 
sideration of your protests are contained in the 
attached statement, which sets forth fully the po- 
sition of the Bureau in connection with your conten- 
tions. 



22 First Natl Bank of Dillon 

1928 

Net Income 

Net income as disclosed by return $4,152.17 

As corrected 4,815.36 



Net adjustment $ 663.19 

Unallowable deductions and additional income: 

(a) Donations $ 79.00 

(b) Profit on sale of 
equipment 300.00 

(c) Excessive depreciation 284.19 



Total 663.19 

Explanation of Items 

(a) Donations are not allowable deductions from 
gross income. 

(b) Burroughs adding machine, fully depreci- 
ated, was sold in 1928 for $300.00. 

(c) Depreciation deducted $2,548.78 
Depreciation allowed 2,264.59 



Amount disallowed $ 284.19 

[20] 



vs. Com mission er of Lit. Ber. 23 

Details of the amount of depreciation allowed 
are shown in exhibit E of the revenue agent's re- 
port for 1928. 

(Computation of Tax 
Income Tax 
Ket income for taxable year $ 4,815.36 

Less : 

Credit 3,000.00 



Balance subject to tax $ 1,815.36 

Income tax 12% $ 217.84 

Total previously assessed 138.26 



Additional tax to be assessed $ 79.58 

1929 
Net Income 

Net income as disclosed by return $ 4,233.96 

As corrected 76,694.19 



Net adjustment $72,460.23 

Unallowable deductions and additional income: 

(a) Nontaxable income $ 200.00 

(b) Donations 156.00 

(c) Loss on stockholder's 
account 73,255.94 



Total $73,611.94 

Nontaxable income and additional deduction: 

(d) Depreciation 1,151.71 



Net adjustment as above $72,460.23 



24 First NaH Banl' of Dillon 

Explanation of Items 

(a) Interest on bonds of the Andrus Hotel Co. 
was included in nontaxable income. 

i.y-3 [21] 

(b) Donations are not allowable deductions from 
gross income. 

(c) Loss on stockholder's account is not allow- 
able as a deduction. This office holds that it has not 
been shown that the assets listed in the stockholders 
account were the property of the bank, or, if they 
were, at what value they were transferred to the 
bank. It is held that many of these assets were 
worthless when the Bancorporation purchased the 
stock of the bank, and the loss properly falls upon 
the stockholders rather than upon the bank. 

(d) The deduction for depreciation is adjusted 
as shown in exhibit E of the revenue agent's report. 

Depreciation allowed $ 2,027.18 

Depreciation deducted 875.47 



Additional allowance $ 1,151.71 

Computation of Tax 

Income Tax 

Ket income for taxable year $76,()94.19 

Income tax 11% $ 8,43().3() 

Total pi'eviously assessed 135.73 



Additional tax to be assessed $ 8,;>0().()o 



vs. Commissioner of Int. Rev. 25 

Consent which will expire December 31, 1931, 
except as extended by the provisions of section 277 
of the Revenue Act of 1928, is on file for the year 
1928. 

iy-3 

[Endorsed] : United States Board of Tax Appeals. 
Filed Nov. 28, 1932. [22] 



[Title of Court and Cause.] 

CONSENT TO AMENDED PETITION 

The Respondent herein, by its Attorney, hereby 
consents to the amendment of the Petition herein 
as herein amended, and the filing thereof. 
Dated this 22 day of November, 1932. 

COMMISSIONER OF INTERNAL 

REVENUE 
By C. M. CHAREST R.W. 

Attorney. [23] 



[Title of Court and Cause.] 

ANSWER TO AMENDED PETITION. 

Now comes the Commissioner of Internal Reve- 
nue, by his attorney, C. M. Charest, General Coinisel, 
Bureau of Internal Revenue, and for answer to the 
amended petition of this taxpayer admits and de- 
nies as follows: 



26 First Xat'J Banlc of Dillon 

1, 2 and 3. Admits the allegations contained in 
paragraphs 1, 2 and 3. 

4- (a) and (b). Denies that the Conmiissioner 
erred as stated in sub-paragraphs (a) and (b) of 
paragraph 4 of the amended petition. 

5- (a) to (i), inclusive. Denies the allegations 
contained in subparagraphs (a) to (i), inclusive, of 
paragraph 5 of the amended petition. 

Denies generally and specitically each and every 
allegation contained in the taxpayer's amended peti- 
tion not hereinbefore admitted, qualified or denied. 

WHEREFORE, it is prayed that the taxpayer's 
appeal be denied. 

(Signed) C. M. CHAREST, 
General Counsel, 
Bureau of Internal Revenue. 
Of Counsel: 
I. GRAFF, 

Special Attorney, 

Bureau of Internal Revenue. 

[Endorsed] : United States Board of Tax Appeals. 
Received and Filed Jan. 10, 1933. [24] 



vs. Commissioner of Int. Be v. 27 

[Title of Court and Cause.] 

Peter S. Rask, Esq., and P. J. Coffey, Esq., for the 

petitioner. 
James M. Leinenkugel, Esq., for the respondent. 

MEMORANDUM OPINION. 

LANSDON : The petitioner is a national bank- 
ing institution engaged in the general banking busi- 
ness at Dillon, Montana. It was organized January 
16, 1894. 

The respondent has determined deficiencies in in- 
come tax for the years 1928 and 1929, in the respec- 
tive amounts of $79.58 and $8,300.63. The petitioner 
has alleged no error in respect of the deficiency de- 
termined against it for the year 1928. Accordingly, 
the action of the respondent as to such year is af- 
firmed. 

Some time prior to the dates hereinafter indi- 
cated, the petitioner's officers conceived the idea of 
creating in its books a non-ledger account, from its 
earnings, to be used in making loans otherwise not 
permitted by the Comptroller of the Currency, and 
Avhich would be carried in the name of its stock- 
holders. Pursuant to this plan, on January 8, 1913, 
the petitioner's [25] board of directors met and 
passed a resolution purporting to declare a special 
cash dividend of Fifty Thousand Dollars, payable 
forthwith. This sum was thereupon placed to the 
credit of the petitioner's stockholders in a new ac- 
count designated "Stockholder's Account." This 
action was ratified by petitioner's stockholders in a 



28 Firfif Xatl Bank of Dillon 

meeting lield on the day following, in a resolution 
which further provided that the Board of Directors 
was authorized to make and declare further special 
dividends of the same character, from time to time, 
as it might deem for the best interests of the stock- 
holders. Two of the bank officials were given juris- 
diction over this account. From time to time addi- 
tional sums were charged to it from regularly de- 
clared dividends upon petitioner's common stock. 
From the funds so created, the jDetitioner's officials 
made loans from time to time, the income from 
which was added to the corpus by appropriate 
charges. At the end of each year the current income 
in this account was added to the bank's surplus and 
distributed anew to the stockholders as ordinary 
dividends on the bank stock. 

On November 12, 1929, certain of the petitioner's 
stockholders entered into a contract with a holding 
corporation known as Northwest Bancorporation, to 
exchange with it their share holdings in the peti- 
tioner's conunon stock for common stock (^f that cor- 
poration, at the rate of 8*54 shares of the latter for 
each share of the petitioner's stock so exchanged. 
This contract, among other things, mentioned "cer- 
tain other assets" not carried in the bank's l)ooks, 
whicli were listed in tln-ee schedules attached, 
marked "stockholders fund" Exhibit A, "Interest 
Account, Exhibit B" and "Charged off assets, Ex- 
hibit C", in reference to which it stated that: [2()] 
The shareholders agree tliat all of such as- 
sets shall become assets of tlie })ank. 



vs. Commissioner of Int. Bev. 29 

On November 12, 1929, the stockholders' account, 
aforesaid, had a book balance of $261,934.11, of 
which $9,400 represented cash and the balance notes 
evidencing loans. The Northwest Bancorporation 
and petitioner's stockholders considered these ac- 
counts as "good" on that date, and treated thorn as 
assets of the bank in fixing the exchange basis for 
the two corporations' stocks to be exchanged. In 
order, however, to protect the stockholders' fund 
against loss in case of any depreciation in value of 
its assets, the Northwest Bancorporation withheld 
from each stockholder, in the exchange of their 
stock, one and three-fourths (1-%) shares, from the 
agreed eight and three-fourths (8-)4) of its own 
stock which it had agreed to give for each share of 
the bank stock, as a guarantee that the stockholders 
would make good any such shrinkage. In that ex- 
change the stock of the Northwest Bancorporation 
was given a value of $70 per share. 

In auditing its books for the calendar year 1929, 
the petitioner charged off the sum of $76,694.19, rep- 
resenting uncollectible loan notes included in the 
stockholders' fund account. It claimed the amount 
of these bad debts as a deduction from its gross in- 
come for 1929, in making out its income tax return 
for that year, which claim the respondent has dis- 
allowed upon grounds, as set out in the statement 
accompanying his deficiency, as follows: 

Loss on stockholders' accounts is not allowal^le 
as a deduction. This office holds that it has not 
been shown that the assets listed in the stock- 



30 Firsi Xiit'l Bank of Dillon 

holders' account were the property of the bank, 
or, if they were, at what vahie they were trans- 
ferred to the bank. It is held that many of 
these assets were worthless when the Bancor- 
poration purchased the stock of the bank, and 
the loss properly falls upon the stockholders 
rather than upon the bank. [27] 

The petitioner alleges in its petition (1) that the 
respondent erred in that holding; and (2) in failing 
to allow your petitioner and "Stockholder's Ac- 
count" an association, to file a consolidated income 
tax return for the taxable year 1929. 

Respecting the allegation of error last assigned, 
there is no showing that the claim there involved 
was made liy the petitioner in tiling its return for 
1929, or at am^ other time in adjusting its tax for 
the year ; so we can only treat it here as a new claim 
raised for the first time in these proceedings and 
alternately urge, in case we should find against the 
petitioner on the first issue. 

We think the petitioner has failed to sustain its 
position from either viewpoint taken in this con- 
troversy. 

7n the first place the petitioner claims it acquired 
title to the stockholders' fund account, in a contract, 
a part only of which is allowed to be put in evidence. 
In I'cf using to offer the entire instrument in evi- 
dence, the petitioner's counsel, among other things, 
said that he was putting in only the facts he con- 
sidered material; and that the rest of it was devoted 



vs. Commhmoner of Tnf. Rev. 31 

to the value of the bank and "what they propose to 
do and what they do not propose to do." In so far as 
this inquiry relates to the transfer of title to prop- 
erty, we are seriously concerned with what the par- 
ties did propose to do with it after its transfer, if 
any, on the bank's books, and that we cannot tell 
without seeing the entire contract. The terms of that 
part of the contract before us in no way purport to 
transfer title in the assets here in dispute to the 
petitioner and provide only that these stockholders, 
who should join in it (and at least 10 ]3er cent of 
them were not parties to it on November 12, 1929) 
' ' agree that all such assets shall become assets of the 
bank". The record shows that after this contract 
of [28] November 12, the bank carried this account 
exactly as it had carried it in the past, ie. as a non- 
ledger account, the only difference being that it 
claimed it as a bank asset in making out its income 
tax return for that year. 

As hereinbefore pointed out, only 1,705 of the 
petitioner's 2,000 shares of stock were represented 
by signers in the November 12 contract, but, even if 
we should hold that that contract was effective to 
transfer title to the stockholders' fund to the peti- 
tioner, we would be unable to find that it sustained 
bad debt losses, as claimed, for the reason that the 
Bancorporation withheld "one and three-quarter 
shares" out of each unit of "eight and three-quarter 
shares" due the stockholders to guarantee the bank 
against any book loss that might result from any 
shrinkage in the value at w^hich these accounts were 



32 First Xat'l BanJc of Dillon 

taken in. The value of tlie shares thus withheld was 
in amount several times greater than the loss here 
contended for; from which it is obvious that the 
petitioner was at all times protected, and that the 
loss, if any, must fall upon the stockholders. 

As to the remaining assignment of error, we find 
no statute which authorizes the filing of consolidated 
returns by a corporation and an uncorporated body. 
Sec. 141 (d) 1928 Act. Eoger Morris Realties, Inc., 
27 B. T. A. 924. 

Decision will be entered for the respondent. 

[Endorsed]: Entered Nov. 14, 1933. [29] 



United States Board of Tax Appeals 
Washington 

Docket No. 61892. 

FIRST NATIONAL BANK OF DILLON, 
MONTANA, 

Petitioner, 

vs. 

COMMISSIONER OF INTERNAL REVENUE, 

Respondent. 

DECISION. 

Pursuant to the determination of the Board, as 
set forth in its memorandum opinion entered No- 
vember 14, 1933, it is 



vs. C ommissioner of Tnt. Rev. 33 

ORDERED and DECIDED: That there are de- 
ficiencies of $79.58 and $8,300.63 for the years 1928 
and 1929, respectively. 

[Seal] (Signed) W. C. LANSDON, 

Member. 

[Endorsed] : Entered Nov. 17, 1933. [30] 



[Title of Court and Cause.] 

ORDER. 

For good cause shown, it is 

ORDERED: That the decision in the above-en- 
titled proceeding, be, and the same is hereby, cor- 
rected to read: "That there is a deficiency of 
$8,300.63 for the year 1929." 

[Seal] W. C. LANSDON. 

Member. 
Dated, Washington, D. C, 

November 22, 1933. [31] 



34 First Xatl Banl- of Dillou 

[Title of Court and Cause.] 

PETITION OF THE FIRST NATIONAL BANK 
OF DILLON, MONTANA, FOR REVIEW 
BY THE UNITED STATES CIRCUIT 
COURT OF APPEALS FOR THE NINTH 
CIRCUIT, OF A DECISION BY THE 
UNITED STATES BOARD OF TAX AP- 
PEALS. 

First National Bank of Dillon, the petitioner, in 
this cause, by P. J. Coft'ey and Peter S. Rask, its 
attorneys, hereby files its Petition for a Review by 
the United States Circuit Court of Appeals for the 
Ninth Circuit of the memorandum opinion by the 
United States Board of Tax Appeals entered on the 
•14th day of November, 1933, and its decision en- 
tered November 17th, 1933, corrected by its sub- 
sequent Order dated November 22nd, 1933, deter- 
mining deficiency in the petitioner's Federal income 
taxes for the calendar year 1929 in the amount of 
Eight Thousand Three Hundred and 63/100 
($8,300.63) Dollars, and respectfully says: 

I. 

The petitioner, the First National Bank of Dil- 
lon, Montana, is a banking association, duly organ- 
ized and existing under and by virtue of the laws of 
the United States, with its principal place of busi- 
ness [32] in the City of Dillon, State of Montana. 
Petitioner seeks a review of the memorandum 
opinion and decision of the United States Board of 
Tax Appeals in the United States Circuit Coui't of 
Appeals for the Ninth Circuit. 



vs. Commissioner of Int. Rev. 35 

11. 

Nature of Controversy 

The cause involves the correct determination of 
petitioner's liability for Federal income tax for the 
calendar year 1929. In the year 1912, the petitioner, 
First National Bank of Dillon, declared a special 
dividend of Fifty Thousand ($50,000.00) Dollars, 
pursuant to due resolutions of its stockholders and 
Board of Directors, for the purpose of making loans 
to its customers not permissible under the Federal 
Laws and the Regulations of the Comptroller of the 
Currency. This sum was credited to a depositor ac- 
count on the books of the bank, and designated or 
named "Stockholders' Account". On November 
12th, 1929, the Stockholders' Account had a net 
worth of Two Hundred Sixty-one Thousand, Nine 
Hundred and Thirty-four and 11/100 ($261,934.11) 
Dollars, of which Nine Thousand Four Hundred 
($9,400.00) Dollars, cash, was deposited in the First 
National Bank of Dillon under the said title "Stock- 
holders' Account", and notes, amounting to Two 
Hundred Fifty-two Thousand, Five Hundred 
Thirty-four and 11/100 ($252,534.11) Dollars, were 
held by trustees of the Account. 

On November 12th, 1929, an agreement was en- 
tered into, under the terms of which the Northwest 
Bancorporation, a holding Company, acquired Nine- 
teen Hundred and Thirty (1930) shares of the com- 
mon stock of the First National Bank of Dillon, pe- 
titioner, prior to December 3rd, 1929. This acquisi- 



36 First Xat'l Bank of Dillon 

tioii was made by exchange of stock of [33] the 
Northwest Bancorporation on the basis of eight and 
three quarters (8%) shares of its stock, for one (1) 
share of petitioner's stock; Bancorporation stock, 
for the purpose of the exchange, having an agreed 
vahie of Seventy and no/100 ($70.00) Dollars per 
share. Under the terms of this contract, the title to 
the assets of Stockholders' Account passed to this 
13etitioner. 

On December 31st, 1929, the petitioner ascertained 
to be worthless, and charged off its books, notes 
amounting to Seventy-six Thousand Eight Hundred 
and Twenty-five and no/lOO ($76,825.00) Dollars, 
practically all of which were notes which had come 
into the Bank as a part of the assets of Stockholders' 
Account. On its Income Tax return for the year 
1929, petitioner deducted as a loss notes in the sum 
of Seventy Six Thousand Six Hundred Ninety-four 
and 19/100 ($76,694.19) Dollars, claiming them as a 
deduction from its Gross income for 1929. 

The Commissioner of Internal Revenue held 
that the notes claimed as a deduction were not allow- 
able as a deduction, for the reason that the assets 
listed in the Stockholders' Account were not shown 
to be the property of petitioner, or if they were, at 
what value they were transferred to the Bank, and 
determined that the loss should properly fall upon 
the stockliolders rather than upon the bank. 



vs. Commissioner of Lit. Rev. 37 

III. 
That said First National Bank of Dillon, being 
aggrieved by the Findings of Fact and Conclnsions 
of Law contained in the said [34] findings and 
nieniorandnni opinion of the United States Board 
of Tax Appeals, entered November 14tli, 1933, and 
by its decision entered pnrsnant thereto on Novem- 
ber 17th, 1933, desires to obtain a review thereof hy 
the United States Circuit Court of Appeals, for the 
Ninth Circuit. 

IV. 

Assignments of Error 
The petitioner herein, by its attorneys, respect- 
fully submits the following Assignments of Error, 
upon which it relies to support its review from the 
memorandum opinion, entered November 14th, 1933, 
and decision, entered November 17th, 1933, in the 
United States Board of Tax Appeals, and asks a 
reversal of the findings and decision of said Board : 

1. The Board erred in refusing to allow as a de- 
duction from petitioner's Gross income for the year 
1929 bad debts ascertained to be worthless and 
charged off, on December 31st, 1929, in the amount 
of Seventy-Six Thousand Six Hundred Ninety-four 
and 19/100 ($76,694.19) Dollars. 

2. The Board erred in its conclusion that title 
to the assets of Stockholders' Account did not pass 
to petitioner and become its property; That such 
finding is contrary to the evidence, and is not sup- 
ported by any substantial evidence. 



38 First Xatl Bank of Dillon 

3. The Board erred in deciding the issues in the 
cause on the ground ' ' that the Bancorporation with- 
held one and three-quarters (1*)4) shares out of each 
unit of eight and three-quarters (8%) shares due 
[35] the stockholders to guarantee the bank against 
any book loss that might result from any shrinkage 
in the value at which these accoiuits were taken in", 
for the reason that there is no evidence whatever of 
any such guarantee to the bank, and that such find- 
ing is wholly unsupported by any evidence whatso- 
ever, and is contrary to the evidence. 

4. The Board erred in determining the cause on 
the ground that stock was withheld to guarantee this 
paper in question for the further reason that Gov- 
ernment counsel limited and restricted the defense 
issue to a determination of the mixed question of 
law and fact as to whether or not title to the assets 
of Stockholders' Account passed to petitioner, and 
among other things, conceded "that if petitioner 
owned those assets as of December 31st, 1929, why, 
of course, it would be entitled to the deduction." 

5. The Board erred in failing to permit or allow 
the petitioner and the Stockholders' Account, as an 
association, to file a consolidated Income tax return 
for the year 1929, and in its finding that "there is no 
showing that the claim there involved was made by 
tlie petitioner in filing its return for 1929, or at any 
other time, in adjusting its tax for the year; so we 
can only treat it here as a new claim, raised for the 
first time in these proceedings, and alternately urged 
in case we should find against the petitioner on tliat 



vs. Commissioner of Int. Rev. 39 

issue", for the reason and upon the ground that such 
assignment is urged in the amended petition, and the 
Board has apparently ignored indisputable testi- 
mony from the record. [36] 

6. The Board erred in failing to apply to the 
facts in this cause the provisions of paragraph (b) 3 
Section 2112, Title 26, U. S. C. A., and paragraph 
(a) 6, Section 2113, Title 26, U. S. C. A. 

WHEREFORE, your petitioner prays that this 
Court may review the opinion and decision of the 
United States Board of Tax Appeals in this cause, 
directing the said Board to determine and enter its 
Order allowing as a deduction from petitioner's 
gross income, for the year 1929, bad debts ascer- 
tained to be worthless and charged off on December 
31st, 1929, in the amount of Seventy Six Thousand, 
Six Hundred Ninety-four and 19/100 ($76,694.19) 
Dollars, and to enter its Order that there is no de- 
ficiency in Federal income taxes for the year 1929, 
and to award your petitioner such other relief as 
may be just and proper, together with the costs and 
disbursements herein. 

Dated this 23 day of Dec, 1933. 

PETER S. RASK, 
Attorney for Petitioner. 
1043 Northwestern Bank Building, 

Minneapolis, Minnesota. 

P. J. COFFEY, 
Attorney for Petitioner. 
1043 Northwestern Bank Building, 

Minneapolis, Minnesota. [37] 



40 First Xaf'l Bank of Dillon 

State of Minnesota 
County of Hennepin — ss. 

Peter S. Rask, being first duly sworn, says tbat 
lie is one of the attorneys for the petitioner in the 
within entitled canse; That he has prepared the 
foregoing Petition, and is familiar with the con- 
tents tliereof ; That the allegations contained therein 
are true to the best of his knowledge, information 
and ])elief, and that this petition is not filed for 
the purposes of delay, and that he believes the peti- 
tioner is justly entitled to the relief sought. 

PETER S. RASK 

Su])scribed and sworn to before me this 23 day 
of December, 1933. 

[Seal] A. S. OZBURN 

Notary l^ublic, Hennepin County, Minn. My Com- 
mission Expires May 14, 1937. 

[Endorsed] : United States Board of Tax Appeals. 
Filed Fel). 5, 1934. [38] 



[Title of Court and Cause.] 

NOTICE OF APPEAL 

TO: The above entitled Resi)ondent and to E. I Bar- 
rett ]^rettyman. General Counsel, Bureau of 
Internal Revenue, Attorney for said Respond- 
ent: 
PLEASE TAKE NOTICE, Tliat the petitioner, 
on tlie r)th day of February, 1934, filed with the 
Clerk of the United States Board of Tax Appeals, 



vs. Commissioner of Int. Be v. 41 

at Wasliiiigtoii, D. C, a l^etition for Review, b}' 
the United States Circuit Court of Appeals for tlie 
Ninth Circuit, of the decision of the Board here- 
tofore rendered in said cause. A copy of the Peti- 
tion for Review and Assignments of Error as filed 
is hereto attached and served upon you. 
Dated this 1st day of February, 1934. 
Respectfully, 

PETE S. RASK 
P. J. COFFEY 
Attorneys for Petitioner 
1043 Northwestern Bank Building 
Minneapolis, Minnesota. [39] 

Due service of the foregoing Notice, together 
with a copy of the Petition for Review and Assign- 
ments of Error is hereby acknowledged this 5th 
day of February, 1934. 

E. BARRETT PRETTYMAN 
General Counsel G. E. A. 

Bureau of Internal Revenue 
Attorney for Respondent. 

[Endorsed] : United States Board of Tax Appeals. 
Filed Feb. 5, 1934. 

[Endorsed] : United States Board of Tax Appeals. 
Received Mar. 12, 1934. [40] 



42 First Xatl BanJx of Dillon 

[Title of Court and Cause.] 

STATEMENT OF EVIDENCE 

The following is a statement of evidence sub- 
mitted to the Board of Tax Appeals on July 12th, 
1933, in the above entitled cause, reduced to narra- 
tive form: 

J. H. GILBERT, 

a witness produced on behalf of petitioner, testified 
as follows: 

Witness is a resident of Dillon, Montana, and is 
President of the First National Bank of Dillon, 
Montana, having been associated with petitioner for 
thirty-two (32) years, and President of the Bank 
a])out twelve (12) years. The petitioner was or- 
ganized under the National Banking Laws on Jan- 
uary 16th, 1884, Avith its principal office at Dillon, 
Montana. In 1911 and 1912, witness was (^ashier 
of the Bank. 

The taxes in controversy are for tlie year 1929, 
and involve the smn of Eight Thousand Three Hun- 
dred and 63/100 ($8,300.63) Dollars. In 1912, a 
fund was set up, known as ''Stockholder's Account", 
in tlie following manner: January 9th, of 1912, the 
following Resolu- [41] tion was duly passed by the 
stockholders of the petitioner: 

''RESOLVED, That the action of the Board 
of Directors of this Bank heretofore taken 
declaring a special dividend of $50,()()(), the 
satne to be credited to and carried on the books 
of the bank among the individual balances, and 



vs. Co}nn}issio}U'}' of hit. Fev. 4||i 

(Testimony of J. H. Gilbert.) 

designated as a Stockholder's Account, to ])e 
used under the direction of the officers of the 
Bank as in their judgment may be for the best 
interests of the stockholders, be and the same 
is hereljy confirmed, approved and ratified. 

"IT IS FURTHER HEREBY RESOLVED 
By the stockholders of this Bank, all being 
present and voting hereon, that the Board of 
Directors be and they are hereby empowered 
and duly authorized to make and declare fur- 
ther special dividends of the same character 
and for the same use as above set forth, when 
in their judgment it shall be for the best in- 
terests of the stockholders hereof." 

On Jul}' 1st, 1915, all of the stockholders of peti- 
tioner executed the following agreement, with re- 
spect to the management of "Stockholders' Ac- 
count ' ' : 

"The undersigned stockholder in the First 

National Bank of Dillon, Montana, owning 

shares of stock therein, hereby consents and 
agrees that the Board of Directors of said 
Bank may at their discretion and upon their 
own judgment declare special dividends out of 
any surplus earnings of the Bank not required 
for regular dividends or other legitimate pur- 
poses, the same to be credited to a Stockholders' 
Account on the books of the Bank, and to ])e 
used as directed by the directors or the officers 
of the Bank for the benefit of the shareholders 



U First Xatn Bank of DiUon 

(Testimony of J. H. Gilbert.) 

of the Bank in proportion to the number of 
shares held by each ; and we hereby ratify and 
confirm any action of the Board of Directors 
herein, heretofore done or which may be here- 
after acted upon in relation to said matter." 

The Stockholders' Account was created out of 
dividends declared by the Bank, and earnings, and 
used for the purpose of making loans which were in 
excess of loans that could be made ])y the Bank 
mider the regulations of the (-omptroller of the 
Currency and the Federal Statutes. [42] 

A separate control of this account was maintained. 
When a special dividend was declared from the 
Bank for the account, it was credited to the Stock- 
holders' Account. In operating the account, loans 
would be made from the account, taking a note, 
charging it against the account, and crediting the 
account of the individual who borrowed the m()n(\v, 
or gi^dng him the money. When the loan was paid, 
the amount would be credited to Stockholders' Ac- 
count. 

All of the funds and assets of Stockholders' Ac- 
count were derived from special dividends declared 
by the Bank, and from earnings accunuilated froiii 
the interest charged on notes that were carried in 
the fund. The earnings from Stockholders' Ac- 
count were distributed in the form of dividends, 
wlicH dividends on the Bank stock were paid. Tbere 
was no individual set-up for each stockholder, si low- 
ing ownership in the fund. Only one account was 



vs. Commissioner of Int. Rev. 45 

(Testimony of J. H. Gilbert.) 

carried in the Bank evidencing the money on hand. 
Other than the resohitions hereinbefore set ont, and 
the agreement of the stockholders with respect to 
management, there was no documentary evidence 
of ownership or title to the assets of Stockholders' 
Account. The ownership in Stockholders' Account 
w^as determined by the stock ownership in the Bank. 
No names of individual stockholders appeared on 
the ledgers or books of the bank, evidencing owner- 
ship in Stockholders' Account. The cash was car- 
ried in one account, entitled "Stockholders' Ac- 
count". 

Prior to November 12th, 1929, when a sale of com- 
mon stock of the Bank occurred, the ownership, or 
interest, of the stockholders of the Bank in the as- 
sets of Stockholders' Account followed the sale of 
[43] the stock to the vendee. Any transfer of stock 
carried with it proportionate equity in assets of the 
Bank and the Stockholders' Fund. If a stockholder 
sold his interest, he signed nothing showing a trans- 
fer of his interest in Stockholders' Account. There 
were no entries on the books of the Bank or stock 
records with respect to the transfer of any interest 
in Stockholders' Account. The only evidence of any 
change of ownership in Stockholders ' Account would 
be the transfer of stock of petitioner, which followed 
the stock interest in the Bank. 

The stockholders had no voice in or control of 
the fund in Stockholders' Account. As to the han- 
dling of the fund prior to 1929, two trustees had 



46 First Xat'J Bank of DiUon 

(Testimony of J. H. Gilbert.) 

been designated to manage the assets of Stock- 
holders' Account, who were loaning officers of 
the Bank. The handling and management of the 
fund was not discussed with the stockholders gen- 
erally. 

A record, called by the witness a "control book", 
was maintained from the time the fund was set 
up. It contained a complete record of all transac- 
tions from the time the fund was set up. 

On November 12th, 1929, the balance in Stock- 
holders' Account was Two Hundred Sixty-one Thou- 
sand, Nine Hundred thirty-four and 11/100 ($261,- 
934.11) Dollars, wdiich consisted of Nine Thousand 
Four Himdred ($9,400.00) Dollars cash, the bal- 
ance, notes evidencing loans. Tlie notes which made 
up the bulk of the assets of Stockliolders' Account 
represented cash loaned from the account to the 
individual makers of the notes. The cost of the 
notes which went to make u]) tlie account was tlie 
face value of the note. "Whatever the amount that 
we loaned was, that would be the amount that we 
would charge the account with. The notes were 
carried on the books at face value, at what they 
cost." [44] 

During 1929, the stock of the First National Bank 
of Dillon, petitioner, was acquired by the North- 
west Bancorporation. Negotiations, looking to its 
acquisition, were commenced in July of 1929, and 
the contract was signed on November 12th of 1929. 



vs. Commissioner of Int. Be v. 47- 

The witness was withdrawal at this point, and 

F. R. MACTAVISH, 

a witne.ss called on behalf of petitioner, testified as 
follows : 

Mr. . MacTavish, the witness, is the Comptroller 
of the Northwest Bancorporation, and employed by 
them since December of 1929. Prior to that time, 
had been employed by the Northwest National Bank 
of Minneapolis, one of the first banks in the North- 
west Bancorporation group. The Northwest Ban- 
corporation is a holding company, which holds the 
stock of about one hundred and twenty-six (126) 
banks in the northwestern states. It is a Delaware 
corporation, with its principal place of business in 
Minneapolis, organized for the purpose of acquiring 
the stock of banks in the northwest. They do not 
supervise the operations of the banks to any great 
extent, but are a holding company, the individual 
banks retaining their own management. 

There was produced, and the witness identified, 
a document, marked "Petitioner's Exhibit 1", w^hich 
w^as the original agreement between the stockhold- 
ers of the First National Banl-s: of Dillon, petitioner, 
and the Northwest Bancorporation, dated November 
12th, 1929, duly executed by the President and Sec- 
retary of the Northwest Bancorporation, Alex High- 
land, Vice President, and R. F. Mactavish (the 
witness). Assistant Secretary- Assistant Treasurer. 
The agTcement, Petitioner's Exhibit 1, being the 
contract covering the acquisition of the stock of 
the [45] First National Bank of Dillon by the Ban- 



48 First Xatl Bank of Dillon 

(Testimony of F. R. Mactavish.) 
corporation, was executed in counterparts. As of 
November 12tli, 1929, the owners of seventeen luni- 
dred and five (1705) shares of petitioner's stock, 
there being two thousand (2,000) shares outstand- 
ing, had signed the counterparts. On December 
31st, 1929, the Northwest Bancori)oration had actu- 
ally acquired nineteen hundred and thirty (1930) 
shares of the two thousand (2,000) outstanding 
shares of stock of petitioner. 

The basis of the exchange of stock was eight and 
three quarters (8%) shares of stock of the North- 
west Bancorporation for one (1) share of stock of 
the First National Bank of Dillon. The agreed basis 
of the stock of the Northwest Bancorporation, with 
reference to the exchange, was Seventy and no /1 00 
($70.00) Dollars per share. 

The following portion of })etitiouer's Kxhibit 1 
was received in evidence: 

''This agreeuient uiade and entered into this 
12th day of November, 1929, by and lietween the 
Northwest Bancorporation, a Delaware corpora- 
tion, liereinafter called the Company, party of 
the first part, and such of the shareholders in 
the First National Bank of Dillon, Mimtaua, 
herein called the Bank, as shall become parties 
hereto by executing this agreement, or any 
counterpart thereof, herein called tlie Sbai'c- 
holders, parties of the second part, 

''Each of the Shareholders agrees that he will 
exchaui'e the sliares of stock in the Bank which 



vs. Conimissioner of Int. Rev. 41) 

(Testimon}^ of F. R. Mactavisli.) 

he owns for eight and three-quarters shares of 
stock of the Compan}^ In the event that any 
Shareholder is entitled to receive a fractional 
share of stock of the Company, according to 
the foregoing arrangement, then such Share- 
holder shall be obliged to accept cash in lieu 
of the fractional share of stock, on the basis 
of $70 per share for each full share of stock 
of the Company. 

"Paragraph 5. In addition to the assets 
which are shown on the books of the Bank, there 
are certain other assets owTied by the Bank 
which are carried in accounts designated ' Stock- 
holders ' Fund,' 'Interest Account,' [46] and 
'Charged-Off Assets', respectively^ The Share- 
holders agree that all such assets shall become 
assets of the Bank." 

The offer of this part of the contract was made 
for two purposes: 

1. As evidence of the transfer of the assets of 
Stockholders' Account to petitioner, 

2. For the purpose of establishing a reorganiza- 
tion in order that petitioner might claim the cost of 
the assets of Stockholders' Account, to the peti- 
tioner, that is, that the successor corporation, as 
a result of the reorganization, is entitled to the same 
basis for determining gain or loss as the original 
holder. 

In its acquisition of petitioner, the Northwest 
Bancorporation acquired the stock of the First 
National Bank of Dillon, which represented the ex- 



50 First Natn Bank of Dmon 

(Testimony of F. R. Mactavish.) 

cess of assets over liabilities, plus this Stockholders' 

Account, plus all charged off assets and the Interest 

account. 

"Q. Now, are j^ou able to state, and do you know, 
Mr. Mactavish, what was represented in the pay- 
ment; or, in other words, what was paid for the 
sum of the assets known as the Stockholders' Ac- 
count?" 

'^A. It was that sum of $261,000 odd that was 
mentioned." 

^'Q. That is the sum that was paid by the Ban- 
corporation to the stockholders of the First National 
Bank of Dillon in the acquisition of that Bank, 
is that correct?" 

"A. That was considered, yes, sir, in the price 
that was paid for the stock." [47] 

The consideration paid by the Northwest Bancor- 
poration at Seventy and no/100 ($70.00) Dollars per 
share, for the assets of Stockholders' Account, was 
$261,000.00 odd. The Northwest Bancor])oration 
have not carried, at any time, the Stockholders' 
Account on the books of the Northwest Bancorj)ora- 
tion at any place. They simply hold the stock of 
petitioner. Only the stock of petitioner is shown 
iu the books of the Northwest Bancorporation. Tlie 
assets of Stockholders' Account have never been 
treated by the Northwest Banc<)r])oration as an asset 
or ])roperty of the Northwest Bancori)oration. The 
assets of Stockholders' Account have been treated 
y)y the Northwest Bancorporation, since the time 
of the acquisition of the Bank on November 12, 



vs. Commissioner of Int. Be v. 51 

(Testimony of F. R. Mactavish.) 
1929, just the same as the capital structure of the 
Bank. The assets of Stockholders' Account, subse- 
quent to the acquisition of petitioner's stock by Ban- 
corporation, were carried on petitioner's books as 
non-ledger assets of petitioner. 

On cross examination, Mr. Mactavish further tes- 
tified that we (the Bancorporation) exchanged eight 
and three-quarters (8%) shares of stock for each 
share of the First National Bank of Dillon. "All 
that we got was a share in the First National Bank 
of Dillon, but in that share the value of this Stock- 
holders' Account was figured in the exchange." In 
the acquisition, we (the Bancorporation) estimated 
the value of the First National Bank of Dillon by 
the capital stock of the Bank, plus the non-ledger 
assets which were considered good, plus the earning 
capacitv of the Bank, plus its future possibilities. 

[48] 

"Q. Now, is it not a fact that your contract also 
provided that the Stockholders' Account that you 
purchased, would have to return so much'?" 

"A. Yes, sir." 

"Q. Yes. And that was also true of the assets 
of the bank proper, was it not?" 

"A. Yes, sir." 

"Q. So that unless the Bancorporation realized 
a certain percentage on those assets, it might result 
that the stockholders of the Bank of Dillon, who 
exchanged their stock for Bancorporation stock, 
would have to make some return as compensation 
for the depreciation of those assets?" 



52 First Natn Banl' of Dillon 

(Testimony of F. R. Mactavish.) 

"A. We held back one and three-quarter (1%) 
shares of stock on the eight and three-quarters (8%) 
shares; we gave outright the seven, and held that 
much back for the performance of the contract, 
that there would be realized that amount of money 
from those accounts. ' ' 

**Q. Yes. And the Bancorporation, all it turned 
over to the stockholders of the First National Bank 
of Dillon was its capital stock?" 

*'A. That is right." 



J. H. GILBERT 

was recalled on behalf of petitioner, and testified 
as follows: 

The officers of the Northwest Bancorporation ex- 
amined the petitioner's bank a))out October 5th, 
1929, for the purpose of determining its condition, 
negotiations having been uiidei- way for the acquisi- 
tion since July. On December ord, 1929, the North- 
west Bancorjjoration had ac- [49] quired eighteen 
hundred and thirty (1830) of the two thousand 
(2000) sliares of outstanding stock of tlie First 
National Bank of Dillon. 

Prior to December 31, 1929, the (exchange of stock 
of petitioner and its acquisition by Northwest Ban- 
corporation had been discussed with every share- 
holder, and all verbally agreed to the transfei'. 

The only shares of petitioner that were not ti'aus- 
ferred, or tliat were not to be transferred, were tlie 



vs. Commissioner of Int. Rev. 53 

(Testimony of J. H. Gilbert.) 

qualifying- directors' shares. The outstanding stock 
of petitioner, not owned by the Bancorporation, re- 
ceived dividends at the Bancorporation rate. 

From the books of the petitioner. First National 
Banli of Dillon, the witness testitied that on Novem- 
ber 12th, 1929, the capital, surplus and undivided 
profits of petitioner was Four Hundred Ninety Five 
Thousand Two Hundred Sixty-six and 29/100 ($495,- 
266.29) Dollars. 

The witness was president of the x^etitioner bank 
at the time of its acquisition by the Bancorporation, 
and the owner of one hundred and thirty (130) or 
one hundred and forty (1-10) shares of stock of peti- 
tioner, and was present during most of the negotia- 
tions in connection with the exchange of the stock 
of petitioner for stock of the Northwest Bancor- 
poration, and, in part, conducted the negotiations for 
the stockholders of the First National Bank of 
Dillon, together with Mr. Bowman, Chairman of the 
Board. He testitied that the consideration for assets 
of Stockholders ' Account received by the stockhlders 
in stock of the Northwest Bancorporation, at Sev- 
enty and no/100 ($70.00) Dollars per [50] share 
was Two Hundred Sixty One Thousand Nine Hun- 
dred ($261,900.00) Dollars odd. 

Since November 12, 1929, the records of Stock- 
holders' Account have been maintained in the same 
control book as was theretofore used. An accurate 
record of the Stockholders' Account, or Fund, has 
been maintained since the consolidation, in the same 



54 First Xaf'l Banl- of Dillon 

(Testimony of J. H. Gilbert.) 

book that it was in before. The assets of Stockhold- 
ers' Account since November 12th, 1929, have been 
treated by petitioner as assets of petitioner. 
Loans have been made out of the fund since 
the acquisition, running into a material amount. 
The notes evidencing the loans being made pay- 
able to the petitioner Bank. The Bank pur- 
chased property on which site its new banking build- 
ing was erected, which site was purchased with 
money taken from this fund. The sum of Six Thou- 
sand ($6,000.00) or Six Thousand Five Hundred 
($6,500.00) Dollars has been used from the funds 
of Stockholders' Account to pay attorneys' fees for 
services rendered in connection with litigation 
against the Bank. The Bank has had possession of 
these assets, books, notes and records of Stock- 
holders' Account since the consolidation. 

The assets of Stockholders' Account, or Fund, 
were carried on the books of the Bank, being treated 
as non-ledger assets of the Bank. All of the assets 
of Stockholders' Account were treated as non-ledger 
assets of the Bank. 

(Mr. Rask) 

*'Q. Now, Mr. Gilbert, did the First National 
Bank of Dillon consolidate the return, the income 
tax return of the old Association, or Stockholders* 
Fund, witli the operations of the Bank for tlie year 
1929?" [51] 



vs. Commissioner of Int. Rev. 55 

(Testimony of J. H. Oilbert.) 

(Mr. Gilbert) 

"A. Yes." 

"Q. And I believe that the Buroan of Internal 
Revenue rejected that return; is tliat correct?" 

''A. Yes, sir." 

On December 31st, 1929, the Bank made certain 
chargeoffs of paper. The authority for charging: off 
the paper in question was by the Board of Directors 
of the Bank in discussion on December 31, 1929. 
The Directors of the Bank directed and authorized 
the chargeoffs. 

There followed testimony on the part of Mr. Gil- 
bert concerning the worthlessness of the paper in 
question, the date of the ascertainment of the worth- 
lessness of said paper, and date of chargeoff. 

The respondents' counsel, at the time of the hear- 
ing, made the following statement: 

(Mr. Leinenkugel) 

''I admit that they were charged off, all of them 
were charged off. There is no question about that 
at all." 

(The Member) 

"Pardon me." 

(Mr. Leinenkugel) 

''I say, I concede, the Government concedes, that 
the amounts of these debts were all charged off with- 
in the taxable year." 

(The Member) 

''Very well." 



56 First Xatl Bank of Dillon 

(The Member) 

''What we are concerned with then is whether 
they were w^orthless, and if so, whom they belonged 
to." [52] 

Tliere followed further testimony from the wit- 
ness concerning the bad debts in question, where- 
u}K»n counsel for respondent, Mr. Leinenkugel, re- 
quested permission to make certain inquiries, as 
follows : 

(Mr. Leinenkugel) 

"I say, if your Honor please, if I w^ere per- 
mitted at this time to ask one or two questions of 
the witness, I might ])e able to concede the worth- 
lessness of all of these accounts." 

The witness testified that the particular charge- 
ofts in question were not ascertained to be worth- 
less on November 12th, 1929, and that at that time 
no determination had been made as to the worthless- 
ness of the accounts. 

The notes in question were ascertained to be 
wortlifess on the date of the charge-oif. The wit- 
ness testified that the notes in question were con- 
sidered all right until they were charged off on De- 
ceuib(>r lUst, 1929. In response to further cross 
examination, the witness testified, in answcM* to the 
following questions, to-wit: 

(Mr. lieinenkugel) 

*'I ask you whether you ascertained in particular 
the fair market value of any of these notes as of 
November the 12th, 1929?" 



vs. Coiumissioner of Int. Rev. 57 

(Testimony of J. H. Gilbert.) 

(Mr. Gilbert) 

''I would say, yes. Now, then, I want to qualify 
that to this extent: I told you that these notes, I 
would say were good and in the assets of the bank 
until they were charged off, and determined to l)e 
bad; so I would say, 'Yes' ". 

After further cross examination I)}' Government 
counsel, the following took place and appears in 
the record of the hearing: [53] 

(Mr. Leinenkugel) 

"But to expedite this case, I am now going to. con- 
cede that they were ascertained to be worthless as 
of December 31st, 1929, and charged off. Now that 
is conceded." 

(The Member) 

''You agree that they were charged off." 

(Mr. Leinenkugel) 

"I agree that they were charged off." 

(The Member) 

"There is no controversy on that, then." 

(Mr. Leinenkugel) 

"I agree." 

(The Member) 

"And you are conceding that they were worth- 
less " 

(Mr. Leinenkugel) 

"I am conceding that they were ascertained to be 
worthless " 

(The Member) 

"As of December 31st ?" 



58 Firsl Xaf'I Banl- of Dillon 

(Testimony of J. H. Gilbert.) 

(Mr. Leinenkugel) 

"As of December 31, 1929." 

(The Member) 

'>A11 right." 

(Mr. l^eiiienkugel) 

"So that there will not be any necessity for fur- 
ther proof on that issue." 

(The Member) 

"Of course, that does not mean that the ptitioner 
is entitled to the deduction that he is asking for, 
because a taxpayer cannot deduct the value of prop- 
erty that belongs to somebody else." 

(Mr. Leinenkugel) 

''That is right, and I am not conceding the de- 
duction." 

It was then further admitted by Government 
counsel that the worthlessness of each of the notes 
in r|uestion had been admitted as [54] of December 
IHst, 1929. Further, that they were ascertained to 
]>{' wortliless on December 31st, 1929, and charged 
off on the books. Then followed the following 
statements, made of record before the Member at 
the iK^aring: 

(Mr. Rask) 

"I take it the fact as to the worthlessness of 
each of these notes in question has ])een admitted." 

(Mr. Leinenkugel) 

''Right." 

(The Member) 

*'As of December 31st." 

(Mr. Ijeinenkugel) 

"Right." 



vs. Commisfiioner of Tut. Rev. 59 

(Testimony of J. H. (Jilbert.) 

(Mr. Rask) 

"1929." 

(Mr. Leinenkugel) 

''Right". 

(Mr. Rask) 

"It lias also been admitted that they were on 
that date, December 31st, 1929, ascertained to be 
worthless " 

(Mr. Leinenkugel) 

"Right". 

(Mr. Rask) 

" and charged off " 



(Mr. Leinenkugel) 

"Right." 

(Mr. Rask) 

" on the books." 

(Mr. Leinenkugel) 

"Right; and if petitioner owned those assets as 
of December 31st, 1929, why, of course, it would l)e 
entitled to the deduction." [55] 

(Mr. Rask) 

"Well, then, I do not presume there is any fur- 
ther need of making further proof on the worth- 
lessness of the assets." 

(The Member) 

"No. The matter seems to resolve itself now 
into a question of law, or a mixed question of fact 
and law, as to who owned these notes when they 
were charged off ; and you have got all of your evi- 
dence on that phase of it, have you nof?" 

(Mr. Rask) 

"Yes." 



60 First Natl Baulc of Dillon 

(Testimony of J. H. Gilbert.) 
Following this, the witness was taken for 

Cross Examination 
by Cxoverninent counsel, and the following testimony 
adduced : 

The (Stockholders' Account was created in 1911. 
A separate record was maintained of this account. 
Consolidated returns were filed, including the in- 
come of the Stockholders' Account together with 
the income of petitioner. 

Up to the time the Bancorporation purchased the 
stock of petitioner, the funds were treated as assets 
of the stockholders. The assets were sold by the 
stockholders in the exchange to the Bancorporation. 

Testifying concerning the acquisition of the stock 
of petitioner by Bancorporation, Mr. Gilbert testi- 
fied further, on cross examination, "When he, the 
stockholder, transferred his bank stock, he trans- 
ferred any equities that he had in the fund l)ack 
to the Bank." Unless a stockholder sold his stock, 
ho maintained his interest in the Stockholders' 
Fund. 

The method of keeping the Stockholders' Account 
is as it was. There has been no change so far as 
the records are concerned, and the method of keep- 
ing it. 

[Endorsed] : United States Board of Tax Appeals. 
Uodged Feb. 5, 1934. 

[Endorsed] : United States Board of Tax Appeals. 
Filed Feb. 21, 1934. [56] 



vs. Commissioner of Int. Rev. 61 

[Title of Court and Cause.] 

ORDER 

This proceeding having been called from the 
Day ('alendar of February 21, 1934, for settlement 
of statement of evidence pursuant to notice of the 
petitioner and on objections to said statement filed 
by respondent, and the respondent having with- 
drawn said objections it is 

ORDERED that the statement of evidence as 
lodged by petitioner February 5, 1934, be and here- 
by is approved and ordered to be filed. 
[Seal] (Signed) CHARLES M. TRAMMELL 

Member 
Dated, February 21, 1934. 
J [57] 



[Title of Court and Cause.] 

PRAECIPE FOR TRANSCRIPT OF RECORD. 

To : The Clerk of the United States Board of Tax 
Appeals: 
You are hereby requested to prepare, certify and 
transmit to the Clerk of the United States Circuit 
Court of Appeals, for the Ninth Circuit, before the 
1st day of April, 1934, a Transcript of Record in 
the above cause, in conformity with the law and 
rules of said Court, and to include in said Tran- 
script of Record the following documents, or duly 
certified copies thereof: 



62 First Xafl Bauh of DiUou 

1. The docket entries of all proceedings before 
the Board of Tax Appeals. 

2. Pleadings before the Board of Tax Appeals, 
as follows: 

(a) Petition for Eedetermination, filed Febru- 
ary 12th, 1932. 

(b) Amended Petition, with Consent thereto, 
dated November 7th, 1932. 

(c) Answer to Amended Petition, filed Janu- 
ary 10th, 1933. 

3. Memorandum Opinion, containing Findings of 
Fact and Opinion of the Board, entered November 
14th, 1933. 

4. Decision and Order of the Board, dated and 
entered November 17th, 1933, and November 22nd, 
1933, respectively. [58] 

5. Notice of Filing Petition for Review, with 
Proof of Service, filed February 5th, 1934. 

6. Petition for Review by United States Circuit 
Court of Appeals, filed February 5th, 1934. 

7. Statement of Evidence, as lodged February 
5th, 1934. 

8. Order Approving Statement of Evidence as 
lodged, dated February 21st, 1934. 

9. This Praecipe for Transcri])t of Recoid. 
Dated March 3rd, 1934. 

PETER S. RASK 

P. J. COFFEY 

Attorneys for Petitioner 
1043 Northwestern Bank Building 
Minneapolis, Minnesota. 



vs. Commissioner of Int. Rev. 63 

Due Service of the Foregoing Praecipe for Tran- 
script of Record, and the Receipt of a Copy Thereof, 
is Hereby Acknowledged this 7th day of March, 
1934. 

E. BARRETT PRETTY^LAN 
General Counsel 
Bureau of Internal Revenue 
Attorney for Respondent. 

[Endorsed]: United States Board of Tax Ap- 
peals. Received and Filed Mar. 12, 1934. [59] 



[Title of Court and Cause.] 

CERTIFICATE. 

I, B. D. Gamble, clerk of the U. S. Board of 
Tax Appeals, do hereby certify that the foregoing 
pages, 1 to 59, inclusive, contain and are a true 
copy of the transcript of record, papers, and pro- 
ceedings on file and of record in my office as called 
for by the Praecipe in the appeal as above num- 
bered and entitled. 

In testimony whereof, I hereunto set my hand and 
affix the seal of the United States Board of Tax 
Appeals, at Washington, in the District of Colum- 
bia, this 10th day of April, 1934. 

[Seal] B. D. GAMBLE, 

Clerk, 
United States Board of Tax A^^peals. 



64 First Xaf'l Bank of Dillon 

[Endorsed]: No. 7462. United States Circuit 
Court of Appeals for the Ninth Circuit. First Na- 
tional Bank of Dillon, Montana, Petitioner, vs. Com- 
missioner of Internal Revenue, Respondent. Tran- 
script of the Record. Upon Petition to Review an 
Order of the United States Board of Tax Appeals. 

Filed April 20, 1934. 

PAUL P. O'BRIEN, 
Clerk of the United States Circuit Court of Appeals 
for the Ninth Circuit. 



United States Circuit Court of Appeals 

FOR THE NINTH CIRCUIT. 



No. 7462. ^-^ 



First National Bank of Dillon^ Montana^ 

Appellant, 

Commissioner of Internal Revenue^ 

Appellee. 



Upon Petition to Review an Order of the United States 
Board of Tax Appeals. 



APPELLANT'S BRIEF. 



Peter S. Rask, 
P. J. Coffey, 
Attorneys for Appellant, 
1043 N. W. Bank Building, 
Minneapolis, Minnesota. 



Hayward Brief Co., 601-7 Fourth Ave. So., Minneapolis 

SEP -4 



■i 



SUBJECT INDEX. 

Page 

Statement of the Case 1 

Specification of Errors 4 

Argument 5 

That Appellant acquired title to Stockholders' Account and 
owned the notes and other assets of Stockholders' Account 

prior to date of charge off of notes 5 

Defense issue was limited by Appellee's concession to the ques- 
tion: "Did Appellant own the assets of Stockholders' Account 

on December 31, 1929?" 14 

The Board bottoms its decision on a finding outside the issues 
and this conclusion is contrary to the facts and unsupported 

by any facts 15 

Conclusion 20 



TABLE OP CASES. 

American Ry. Express Co. v. Lindenburg, 43 Sup. Ct., 206, 260 U. 

S. 584 12 

Backer v. Phillips, 289 Pac. 905 16 

Blackmer v. Commissioner of Internal Revenue, 70 F. (2d) 255, 

C. C. A., 2nd Cir 13 

Boggs & Buhl V. Comm'r, 34 F. (2d) 859 13 

Fultz V. Walters, 2 Mont. 165 10 

Ingram v. Mandler, 56 Fed. (2d) 994 11 

Jameson v. Diggs, 276 Pac. 969 16 

Leonard v. White, 5 Allen 177 15 

Northwest Mutual Life Insurance Co. v. Wright, Cited at 153 Wis. 

252, 140 N. W. 1078, 1080 12 

5 C. J. 906 12 

8 C. J. 384 11 

64 C. J. 1259, Par. 1106 16 

64 C. J. 1265 16 

60 C. J. 73, Par. 59 16 



United States Circuit Court of Appeals 

FOR THE NINTH CIRCUIT. 



No. 7462. 



First National Bank op Dillon,, Montana^ 

Appellant, 

vs. 



Commissioner of Internal Revenue^ 



Appellee. 



APPELLANT'S BRIEF. 



STATEMENT OF THE CASE. 

This cause involves income tax of the appellant for the 
year 1929, and arises out of deductible losses claimed by ap- 
pellant in the sum of |76,825.00, representing bad debts as- 
certained to be worthless and charged off its books December 
31st, 1929. 

Appellant, First National Bank of Dillon, is a National 
Banking Association, located at Dillon, Montana, organized 
in 1884. In 1912, by a stockholders' resolution, a special 
dividend of |50,000.00 was declared and deposited in the 
bank to be used as a fund managed by two trustees, who 
were loaning officers of the bank, for the purpose of making 
loans in excess of the legal loan limit of the bank ( Tr. 42 ) . 

In 1915, all of the stockholders authorized the declaration 



of further special dividends for the same purpose, to be 
added to stockhokiers' account, confirming all action of the 
board of directors. This fund was called stockholders' ac- 
count or fund. 

From this stockholders' fund, loans were made from time 
to time, and on November 12th, 1929, stockholders' account 
had increased b}- special dividends and earnings to f261,- 
934.11, which was represented by |9,400.00 cash, the balance 
notes evidencing loans (Tr. 46). 

There existed no documentary evidence of title to the 
assets of stockholders' account. The ownership of stock- 
holders' account was vested in the stockholders in propor- 
tion to their stock holdings in the bank. 

Prior to 1929, when a sale of stock of the bank occurred, 
the interest in stockholders' account represented by tlie stock 
sold followed the sale of the stock to the vendee (Tr. 45). 

Prior to November 12, 1929, two trustees, who were loan- 
ing officer-s of the bank, had managed the fund. A book- 
keeping system had been set up covering the operations of 
this account. It was called the "control book" (Tr. 46). 

The notes of stockliolders' account had a cost to stock- 
hohlers' account of the face value of tlie notes. 

On November 12th, 1929, the Northwest Bancorporation, 
a holding company owning stock of banks, signed an agree- 
ment with the owners of 1,705 shares out of 2,000 shares of 
appellant's outstanding stock, whereby the stock of appel- 
lant was to be exchnnged for the stock of Northwest lian- 
corporation, on the basis of <S and %'s shares for one share 
of api)e]lant\s stock. Prior to December «Ust, 1929, the 
Northwest Pancorporation, in accordance with said agree- 
ment, ac<iuired 1930 shares of af)pellant (Tr. 48). The 
agreed value of the stock of the Pancorporation was 170.00 
per share (Tr. 48). 



3 

The contract of acquisition between the Bancorporation 
and the stockholders provided : 

"Paragraph 5. In addition to the assets which are 
shown on the books of the bank, there are certain other 
assets owned by the bank which are carried in accounts 
designated ^Stockholders^ Fund/ 'Interest Account,' and 
'Charged-Oif Assets,' respectively. The shareholders 
agree that all such assets shall become assets of the 
hank." (Italics ours.) 

In its acquisition of the stock of appellant, the Northwest 
Bancorporation, paid the stockholders of appellant by ex- 
change of its stock on the basis of |70.00 per share, some 
|261,000.00 (the book value of stockholders' account) and 
caused the assets of stockholders' account to be transferred 
from the stockholders of appellant to appellant. 

The Northwest Bancorporation did not carry the stock- 
holders' account on its books, but from the time of the ac- 
quisition, treated it as an asset of appellant, and as a part 
of the capital structure of the bank. The stockholders' ac- 
count was carried on appellant's books as non-ledger assets 
(Tr. 50-51). 

Subsequent to November 12th, 1929, the appellant handled 
and treated stockholders' account as an asset of appellant. 
Loans were made from the funds, the notes taken being made 
payable to appellant. Appellant expended moneys from the 
account for the purchase of its building site. Some |6,- 
500.00 was used from the funds to pay attorney's fees aris- 
ing out of litigation against the bank. From and after 
the acquisition, the appellant had possession of the assets, 
books, notes and records of stockholders' account. The as- 
sets, from November 12th, 1929, were non-ledger assets of 
the bank (Tr. 54). 



The notes representing; stockholders' account were consid- 
ered good at the time of acquisition and up to the time of 
charge-off on December 31st, 1929 (Tr. 55). The notes 
charged off, amounting to |76,825.00, were notes which had 
come into the bank from stockholders' account. 

The appellee has contended throughout that these notes 
w^ere not assets of the appellant. In the first instance, ap- 
pellee contended that the notes were worthless when they 
were acquired by the bank from stockholders' account. That 
issue, however, was eliminated by an admission of the ap- 
pellee's counsel at the hearing (R. 59), and appellee, at that 
liearing, limited their defense to the issue as to whether or 
not the appellant was the owner of the assets of stockholders' 
account on December 31st, 1929 (Tr. 59), and said, "If peti- 
tioner owned those assets as of December 31st, 1929, why, of 
course, it would be entitled to the deduction.'' 

SPECIFICATION OF ERRORS. 

1. The board erred in refusing to allow as a deduction 
from appellant's gross income for the year 1929, bad debts 
ascertained to be worthless and charged off on December 
31st, 1929, in the amount of seventy thousand two hundred 
ninety-four and 88/100 (|70,294.88) dollars. 

2. The board erred in failing to find that title to the 
assets of stockholders' account passed to appellant and be- 
came its property in 1929. That the evidence requires such 
finding. 

3. The board erred in deciding the issues in the cause on 
the ground "that the r>ancorporation withheld one and three- 
quarters (1*H) shares out of each unit of eight and three- 
quarters (8%) shares due the stocklioldcis lo guarantee the 



bank against any book loss that might result from any 
shrinkage in the value at which these accounts were taken 
in," for the reason that there is no evidence whatever of any 
such guarantee to the bank, and that such finding is wiiolly 
unsupported by any evidence whatsoever, and is contrary to 
the evidence. 

4. The board erred in determining the cause on the 
ground that stock was withheld to guarantee this paper in 
question and for the further reason that government coun- 
sel limited and restricted the defense issue to a determina- 
tion of the mixed question of law and fact as to whether or 
not title to the assets of stockholders' account passed to peti- 
tioner, and among other things, conceded, ''That if petitioner 
owned those assets as of December 31st, 1929, why, of course, 
it would be entitled to the deduction." 

ARGUMENT. 

The consideration of this appeal and its preparation is 
more difficult for the reason that the Board of Tax Appeals 
failed to make any separate findings of fact. The memoran- 
dum opinion appears on page 27 of the transcript. 

Assignments of error numbers one, two and four, will be 
argued together. 

lender these assignments, the appellant contends that it 
is entitled to a deduction from its gross income for the year 
1929, of $70,294.88, arising out of bad debts ascertained to 
be worthless and charged off on December 31st, 1929. 

It is our contention that the appellant acquired title to 
the assets of stockholders' account on November 12th, 1929. 
With reference to this contention, it should be noted that 
no specific findings as to the ownership of the assets of 
stockholders' account was made by the member in his memo- 



6 

randnm opinion, unless a contrary finding is to be inferred. 

The appellant also nrges at this point that the appellee 
has restricted and limited its defense to one issne bv coun- 
sel's statement at the hearing, appearing on page 59 of the 
transcript, "and if petitioner owned those assets as of De- 
cember 31st, 1929, why, of course, it would be entitled to 
the deduction," 

The following evidence appears in the record, concerning 
the ownership and management of the assets of stockholders' 
account prior and subsequent to November 12th, 1929 : 

The creation and purpose of stockholders' account appears 
in the resolution of the board of directors (Tr. 42-43) and 
the agreement executed by all of the stockholders on July 
1st, 1915. These documents disclose that the funds called 
"Stockholders' Account'' are to be used under the direction 
of the officers of the bank for the best interest of the stock- 
holders. 

The directors are authorized to make and declare further 
special dividends for the same purpose. The agreement re- 
ferred to confirms the resolution, and discloses further that 
the ownership of stockholders' account is to be in the share- 
holders in proportion to the number of shares of appellant's 
stock. Loans were made from the account, taking a note, 
charging it against the account, and cre<liting the borrower. 
On payment of the loan, the amount was credited to stock- 
holders' account. Earnings from stockholders' account were 
distributed in the form of dividends when dividends on the 
bank stock were paid (Tr. 44). 

There was no documentary evidence of ownership or title 
to the assets of stockholders' account, excepting the resolu- 
tion and agreement heretofore mentioned. The ownership 
was determined by stock ownership in the bank. The cash 
was carried in one account, entitled, "Stockholders' Ac- 



count." Prior to November 12tli, 1929, on a sale of bank 
stock, the ownership of proportionate interest in the assets 
of stockholders' account followed the sale of stock to the 
vendee. A stockholder, on sellin«]j his interest in stockhold- 
ers' account, sij>:ned no documents shoAving a transfer of the 
interest in stockholders' account. No entries were made on 
the books of the bank or stock records with respect to the 
transfer of stockholders' account. The stockholders had no 
voice in the management or control of the fund in stock- 
holders' account (Tr. 45). 

Prior to 1929, two trustees had been designated to manage 
the assets of stockholders' account, who were loaning officers 
of the bank (Tr. 45-46). A complete record of all transac- 
tions of stockholders' account had been maintained. The 
notes which made up a large part of stockholders' account 
represented cash loaned from the account to makers of notes. 
The face value of notes represented their cost, and were car- 
ried on the books at face value (Tr. 46). 

During 1929, the stock of appellant was acquired by the 
Northwest Bancorporation, under the terms of a contract 
signed November 12th, 1929, by and between the Northwest 
Bancorporation and the shareholders of appellant (Tr. 46). 
The Northwest Bancorporation is a holding company, which 
holds the stock of numerous banks in the Northwest. They 
do not supervise the operations to any great extent. The 
comptroller of the Northwest Bancorporation identified a 
document, Petitioner's Exhil)it I, which was the original 
agreement of acquisition between the stockholders of appel- 
lant and the NorthAvest Bancorporation (Tr. 47). 

Prior to December 31st, 1929, the Northwest Bancorpora- 
tion had acquired 1,930 of the 2,000 outstanding shares of 
the stock of appellant (Tr. 48). On November 12th, 1929, 
the owners of 1,705 shares agreed to the exchange. 



8 

Paragraph five of the contract of acquisition, Petitioner's 
Exhibit I ( Tr. 49 ) , reads as follows : 

"Paragraph 5. In addition to the assets which are 
shown on the books of the bank, there are certain other 
assets owned by the bank which are carried in accounts 
designated, 'Stockholders' Fund,' 'Interest Account,' 
and 'Charged-Off Assets,' respectively. The sharehold- 
ers agree ihui all such assets shall become assets of the 
ha^k/' (Italics ours.) 

The Northwest Bancorporation paid the stockholders for 
the assets of stockholders' account |261,000.00 in stock of 
the Northwest Bancorporation, at |70.00 per share. The 
Northwest Bancorporation never carried on its books the 
item, "Stockholders' Account." They simply hold the stock 
of appellant, and only the stock of appellant is shown on 
the books of the Northwest Bancorporation. The assets of 
the stockholders' account have never been treated by the 
Northwest Bancoi-poration as an asset or property of the 
Northwest Bancorporation. The assets of stockholders' ac- 
count have been treated by the Northwest Bancorporation, 
since November 12th, 1929, as part of the capital structure 
of the appellant bank. The assets of stockholders' account, 
subsequent to the acquisition of appellant's stock by Ban- 
corporation, were carried on the books of the First National 
Bank of Dillon as non-ledger assets of that bank (Tr. 50- 
51). 

The above testimony was elicitetl from the comptroller 
of the Northwest Bancorporation, 

The president of the First National Bank of Dillon, ap- 
pellant, who has been one of its employees and stockholders 
for thirty-two years, testified as to the ownership of assets. 

The assets of stockholders' account since November 12th, 



9 

1929, have been treated as assets of the First National Bank 
of Dillon (Tr. 54). 

The following' illustrations were given by Mr. Gilbert, its 
president, of the employment of the fnnds formerly in stock- 
holders' account, since November 12th, 1929 : 

Loans have been made ont of the fund since the acquisi- 
tion, running into a material amount, the notes evidencing 
the loans being made payable to the appellant bank. The 
bank purchased property on which site its new banking build- 
ing was erected, which site was purchased with money taken 
from this fund. Upwards of |6,000.00 has been used from 
the funds of stockholders' account for paying attorneys' fees 
for services rendered in connection with litigation against 
the bank (Tr. 51). 

The bank has had possession of the assets, the books, notes 
and records of stockholders' account since November 12th, 
1929. The assets of stockholders' account were carried on 
the books of the bank and treated as non-ledger assets of the 
bank since the acquisition (Tr. 54). 

From this testimony, it appears that in 1912, something 
in the nature of a partnership or association was created by 
the stockholders of the bank, their interests in the assets of 
the association being proportionate to their stock holdings 
in the bank. This association conducted a business of mak- 
ing excess loans, and was handled by two trustees for the 
association. 

When the Northwest Bancorporation acquired the stock 
of the bank, they had no further need for such an associa- 
tion. They purchased the assets of this association, called 
the stockholders' account, as appears from the testimony, 
and it also appears very definitely that they had no inten- 
tion of conducting a separate association or continuing the 



10 

operations of this fund. In their contract of acquisition, 
they agree with the shareliolders, ''The shareholders agree 
that all such assets shall become assets of the hank/' re- 
ferring to the stockholders' fund or account. 

The board member, in his opinion, on pages 30 and 31 of 
the transcript, saj's, "In refusing to offer the entire instru- 
ment in evidence, the petitioner's counsel, among other 
things, said that he was putting in only the facts he con- 
sidered material ; and that the rest of it was devoted to the 
value of the bank and 'what they propose to do and what 
they do not propose to do.' In so far as this inquiry relates 
to the transfer of title to property, we are seriously con- 
cerned with what the parties did propose to do with it after 
its transfer, if any, on the bank's books, and that we cannot 
tell without seeing the entire contract. The terms of that 
part of the contract before us in no way purport to transfer 
title in the assets here in dispute to the petitioner." 

The member's use of the words "refusing to offer the en- 
tire instrument in evidence" is not an accurate statement. 
The entire instrument was before the board, and a copy in 
the possession of respondent's counsel. It contained no 
other facts concerning the transfer of these assets. 

We disagree with the board member when he states that 
the terms of the contract in no way pui'port to transfer title 
in the assets of stockholders' account. In that agreement, 
the stockholders agreed that this fund should become a part 
of the assets of the bank. 

The instrument of acquisition clearly indicates that it was 
the intention of the Bancorporation that the assets of stock- 
holders' account should become a part of the assets of the 
bank. 

An early Montana case, Fultz v. Walters, 2 Mont. 105, 



11 

holds that an assignment of a negotiable instrument by 
parol is sufficient. 

From decisions of the Circuit Court of Appeals and fol- 
lowing citations, it would seem that the terms of the con- 
tract were sufficient to transfer title of the assets to the 
appellant bank, especially in view of the evidence that the 
bank, subsequent to November 12th, 1929, took possession 
of all the books, records and assets of the stockholders' fund, 
made new loans payable to the bank itself, and used the pro- 
ceeds collected on the notes for purposes strictly related to 
the bank itself, and not the association. 

"A promissory note, like an ordinary chose in action, 
may be transferred by assignment without the actual 
delivery of the note. Baldwin v. Reynolds (C. C. A. 6), 
189 F. 852; Stafford v. Bond^ 106 Okl. 173, 233 P. 185, 
186; Johnson v. Beickey, 64 Utah 43, 228 P. 189, 191. 
In order for a writing to constitute an assignment of a 
chose in action, no particular form of words is neces- 
sary, provided they manifest an intent to transfer the 
title thereto. Clark v. Sigua Iron Co. (C. C. A. 3), 81 
F. 310, 312 ; 5 C. J., p. 906, par. 73. We conclude that 
the contract effectually transferred the title to defen- 
dant." 

Ingram v. Handler, Circuit Ct. of Appeals, Tenth 
Circuit, March 1, 1932, 56 Fed. (2d) 994. 

"In the absence of a statute to the contrary, a writ- 
ten assignment is unnecessary, whether the note is nego- 
tiable or non-negotiable, and an assignment by parol 
is sufficient." 
8 C. J. 384. 

"Any language, however informal, if it shows inten- 
tion of the owner of the chose in action to transfer it, 



12 

will be sufficient to vest the property therein in the 
assignee." 

5 C. J. 906. 

Attention of the conrt is again directed to the fact that 
the appellant bank not only had possession of stockholders' 
fund, its books and assets, subsequent to November 12th, 
1029, but also that it used proceeds from this fund in sev- 
eral ways for bank purposes, that is, it acquired a banking 
site, paid out money for attorneys' fees for services in con- 
nection with litigation against the bank, made new notes 
payable to the bank, and ascertained part of the notes bad, 
and charged them from its books. 

In connection with this, the court's attention is directed 
to a rule of general application : 

"Where an act is done which can be done legally only 
after the performance of some prior act, proof of the 
latter carries with it a i)resumption of the due perform- 
ance of the prior act. Knox County v. Ninth National 
Bunk, 147 U. S. 91, 97; 13 Sup. Ct. 207; 87 L. Kd. 93." 
American Ry. Express Co. v. Lindenhurg , 43 Sup. 
Ct. 206, 260 U. S. 584. 

The facts disclose that certainly the appellant exercised 
complete dominion over the assets, and further attention of 
the court is invited to language contained in a case concern- 
ing the assignment of a chose in action, wherein the court 
said : 

"The transition may be acc()mi)lished by acts or 
words, or both, showing intention to ])art with title and 
deprivation of dominion over the thing or paper calling 
therefor." 

Northwest Mutual Life Insurance Go. v. Wright, 
cited at 153 Wis. 252, 140 N. W. 107S, lOSO. 



13 

We submit that this evidence and the law cited clearly 
demonstrate that the appellant bank acquired the assets of 
stockholders' account. 

The board member, in his opinion, and in failing to make 
a findino- concerning the ownership of stockholders' account 
subsequent to November 12th, 1929, apparently disregarded 
entirely that part of the testimony of the president of the 
bank, and the comptroller of the Northwest Bancorporation, 
concerning and relating to the possession, use and manage- 
ment of the assets of stockholders' account, subsequent to 
November 12th, 1929. 

The Circuit Court of Appeals, for the Second Circuit, has 
said: 

"And the board may not arbitrarily discredit the 
testimony of an unimpeached taxpayer so far as he testi- 
fies to facts. A disregard of such testimony is suffi- 
cient for our holding that the taxpayer has sustained 
the burden of establishing his right to a reduction and 
error has been committed in a contrary ruling. Boggs 
d Buhl V. Comm'r, 34 F. (2d) 859 (C. C. A. 3)." 

BJackmer v. Cowiwiissioyier of Internal Revenue, 
70 F. (2d) 255, C. C. A., 2nd Cir. 

The appellant contends that the appellee must stand ui^on 
its one defense, to-wit : That of the ownership of the assets 
of stockholders' account subsequent to November 12th, 1929. 

The attention of the court is directed to the transcript. 
J. H. Gilbert, the president of the bank, was being examined 
on direct when respondent's counsel requested permission 
to examine the witness before the direct examination was 
completed (Tr. 56). He then elicited mth further refer- 
ence to the stockholders' account, that these notes (the 
notes charged off) were good and in the assets of the bank 



14 

until they were charged otf (Tr. 57). He then, at some 
length (Tr. 57-5S) conceded that the notes in question were 
ascertained to be worthless as of December 31st, 1929, and 
charged otf the books of appellant on December 31st, 1929. 
He did not concede the deduction (Tr. 58). The member 
stated : "Of course, that does not mean that the petitioner 
is entitled to the deduction that he is asking for, because a 
taxpayer cannot deduct the value of property that belongs 
to somebody else." 

(Mr. Leinenkugel) 

"That is right, and I am not conceding the deduction." 

However, respondent's counsel, page 59 of the transcript, 
after further discussion between the member and petitioner's 
attorney, stated: 

(Mr. Leinenkugel) 

"Right, and if petitioner owned those assets as of 
December 31st, 1929, why, of course, it would be entitled 
to the deduction.'' 

(Mr. Rask) 

"Well, then, I do not presume there is any further 
need of making furtlier i)roof on the worthlessness of 
the assets." 

(The Member) 

"No. The matter seems to resolve itself now into a 
question of law, or a mixed question of fact and law, 
as to who owned these notes when they were charged 
off; and you have got all of your evidence on that phase 
of it, liave you not?" 

(Mr. Rask) 

"Yes." 

The respondent here limited his defense, after conceding 
certain facts, to one dclense issue, were ihc assets of slock- 



15 

holders' account owned hy the appellant hank on December 
Slst, 1929. 

The board member stated that this issue was a mixed 
question of law and fact, and indicated that a findino^ in 
that regard would be made. An examination of his memo- 
randum opinion discloses that the decision contains no di- 
rect finding on this issue (unless such finding is to be in- 
ferred), and then he proceeds to bottom his decision on a 
purely extraneous, immaterial and inaccurate conclusion, 
appearing in his memorandum opinion on page 31 of the 
transcript wherein he says : 

"As hereinbefore pointed out, only 1,705 of petition- 
er's 2,000 shares of stock were represented by signers 
in the November 12 contract, but, even if we should 
hold that that contract was effective to transfer title 
to the stockholders' fund to the petitioner, we would be 
unable to find that it sustained bad debt losses, as 
claimed, for the reason that the Bancorporation with- 
held 'one and three-quarter shares' out of each unit of 
'eight and three-quarter shares' due the stockholders to 
guarantee the bank against any book loss that might 
result from any shrinkage in the value at which these 
accounts were taken in." 

The inaccuracy will be discussed in connection with the 
next point. 

So, after the respondent's counsel, limiting the issues to 
a particular defense, the member erroneously bases his de- 
cision on an immaterial finding. 

With respect to appellant's contention that the defense 
was limited to the particular issue, that is, the ownership 
of the assets of stockholders' account, the court's attention 
is invited to an early Massachusetts case, Leonard v. White, 



16 

5 Allen 177, where the eonrt held as to issues, that if the 
defendant hinds himself to defend only npon a certain 
gronnd, the plaintiff need not prove facts not essential to 
entitle him to recover as against the defense so limited. 
60 C. J. 73, par. 59. 

"Findings contrary to, or inconsistent with admitted 
or agreed facts, are nnanthorized, nnjiistitied, erroneous 
and without effect, and cannot stand." 
64 C. J. 1259, par. 1106. 
See cases cited in notes 68 to 74. 

"Findings should be stricken npon which the court 
had stated that it would not rule." 
64 C. J. 1265. 

Backer v. PhilUps, 289 Pac. 005. 
Jameson r. Di(jf/.s, 276 Pac. 969. 

In specification of error nundier three, appellant con- 
tends that the board erred in deciding the cause on the 
ground "that the Bancor])oration withheld one and three- 
quarters shares out of each unit of eight and three quarters 
shares due the stockholders to guarantee the bank against 
any book loss that might result from any shrinkage in the 
value at which these accounts were taken in." 

Your appellant submits that there is absolutely no testi- 
mony in the record to warrant such a finding. 

The finding in itself might be immaterial, except for the 
fact that the board bottoms its decision upon this (|uesti()n, 
which is in no way nmteiial to the issues, and which finding 
is contrary to the evidence. 

The testimony concerning this finding is to be found on 
pages 47, 48, .">! and 52 ol the transcript. 

Attention is invited to the fact that the witness, F. R. 
Mactavish, is no empk>yee of lh(> ;i])i)('llan( bank. He is, 



17 

and has been, the comptroller of the Northwest Baneorpora- 
tion. This witness identified Petitioner's Exhibit Number 
One, the a^i^reement between the Northwest Bancorporation 
and the stockholders of the appellant bank, dated Novem- 
ber 12th, 1929. 

He testified (Tr. 51) that the Bancorporation exchanged 
eight and three-quarters shai'es of its stock for each share of 
stock of the First National Bank of Dillon. Respondent's 
counsel took the witness for cross examination (Tr. 51), 
and from his questions, it is apparent that not only the 
member of the board, but also the respondent's counsel, 
failed to properly have in mind all of the parties and sepa- 
rate entities to this transaction, that is: (1) The North- 
west Bancorporation as one entity, of which the witness, 
Mactavish, was the comptroller; (2) The First National 
Bank of Dillon, which was a banking association, and as 
an entity, had no part in the contract concerning the ac- 
quisition of its stock by the Northwest Bancorporation ; 
(3) The stockholders of the First National Bank of Dillon, 
who, as individual stockholders, dealt with the Northwest 
Bancorporation in the exchange of stock, the stockholders 
dealing as individuals ; ( 1 ) The stockholders' account, which 
was in the nature of a separate entity (we suggest an asso- 
ciation) up to the time of the acquisition on November 12th, 
1929. 

With this in mind, attention is directed to the cross ex- 
amination. Respondent's counsel asked the comptroller of 
the Bancorporation : 

(Mr. Leinenkugel) 

"Now, is it not a fact that your contract also pro- 
vided that the stockholders' account that you purchased 
would have to return so much?" 
(Mr. Mactavish) 



18 

"A. Yes, sir, 

"Q. Yes. And that was also true of the assets of 
the bank proper, was it not? 

"A. Yes, sir. 

"Q. So that unless the Bancorporation realized a 
certain percentage on those assets, it might result that 
the stockholders of the Bank of Dillon, who exchanged 
their stock for Bancorporation stock, would have to 
make some return as compensation for the deprecia- 
tion of those assets? 

"A. We held back one and three-quarters (1%) 
shares of stock on the eight and three-quarters {S%) 
shares; we gave outright the seven, and held that much 
back for the performance of the contract, that there 
would he realised that amount of money from those 
accounts'^ (Tr. 51). (Italics ours.) 

Where, in this testimony, is there anything that would 
justify the finding of the board, "for the reason that the 
Bancorporation withheld one and three-quarters shares out 
of each unit of eight and three-quarters shares due the stock- 
holders, to guarantee the bank against any book loss tliat 
might result from any shrinkage in value at which these 
accounts were taken in." 

The bank was no party to this agreement. The bank had 
no guarantee against depreciation of assets. The witness 
says: "\\'e hehl back one and three-quarters shares * * * 
for the performance of tlie contract, that tliere wouhi be 
realized that amounl of money I'l'om tliose accounts'' (Tr. 
52). 

Wlicii Ibis witness uses I he word, "we," lie can nu^an no 
one else but I lie Noil Invest Bancorporation. 

The ell'ect of this fesliuionv is that the Xoithwest Bancor- 



19 

poration aj^reed to pny to certain individuals, appellant 
stockholders, a certain snni for the stock of appellant in the 
event the assets of tlie bank proved jj;ood, to a degree set 
forth in tlie contract. In the event of the failure of liquida- 
tion of certain assets in the bank, the one and three-qnarter 
shares would not be issued to the stockholders, and hence, 
a lesser consideration would be paid for appellant's stock. 
In other words, the purchase price as between the North- 
west Bancorporation and the individual stockholders of the 
appellant bank was dependent upon the determinable value 
of certain assets in the bank. The bank was no party to 
this agreement, and could not be affected thereby. The 
Bancorporation merely agreed with the stockholders, we will 
give you eight and three-quarters shares for one share of 
your stock, under certain conditions, and if those conditions 
are not met, we will give you seven shares of Bancorpora- 
tion stock for each share of stock of appellant bank. 

This testimony, in nowise, can be given the interpretation 
placed on it by the board. 

The member writing the opinion makes a statement, go- 
ing further astray, which discloses another error in connec- 
tion with this transaction, appearing Transcript 32 : 

"The value of the shares thus withheld was in amount 

several times greater than the loss here contended for; 

from which it is obvious that the petitioner was at all 

times protected and that the loss, if any, must fall upon 

the stockholders." 

That for the purpose of income tax or for any other pur- 
pose neither the appellant bank or the stockholders' account 
as separate entities, could realize profit or sustain a loss by 
reason of the sale or exchange of appellant's stock by the 
individual stockholders to the Northwest Bancorporation. 



20 

This agreement was to protect the purchasers of the stock 
of appellant, that is, the Bancorporation, and not the bank 
itself. 

CONCLUSION. 

In conclusion, we respectfully submit: 

1. That the opinion and decision of the Board of Tax 
Appeals should be reversed. 

2. That the title to the assets of stockholders' account 
was vested in appellant at and prior to the date of charge- 
off on December 31st, 1929. 

3. That the defense issue was limited to the question of 
the ownership of the assets of stockholders' account. 

4. That the appellant sustained losses in the taxable year 
1929 in the amount of |7(),294.88, by reason of bad debts 
ascertained to be worthless and charged off within the tax- 
able year, and is, by reason thereof, entitled to a like deduc- 
tion from gross income for the year 1929. 

Peter S. Rask, 
P. J. Coffey, 
Attorneys for Appellant, 
10J,3 N. W. Bank Building, 
^ A /L0]^ I Minneapolis^ Minnesota. 




tiSUvU, 



No. 7462 



In the United States Circuit Court of 
Appeals for the Ninth Circuit 



FiEST National Bank of Dillon, Montana, 
petitioner 

Commissioner of Internal Revenue, respondent 



ON PETITION FOR REVIEW OF DECISION OF THE UNITED 
STATES BOARD OF TAX APPEALS 



BRIEF FOR THE RESPONDENT 



FBANK J. WIDEMAN, 

Assistant Attorney Oeneral, 

sewall key, 

j. louis monarch, 

louise foster, 

Special A.sfiistants to the Attorney Oeneral. 



s 



INDEX 



Page 

Opinion below 1 

Jurisdiction 1 

Question presented 2 

Statute involved 2 

Statement 2 

Summary of argument 8 

Argument 10 

Conclusion 25 

CITATIONS 

Cases: 

Anderson v. Wilson, 289 U. S. 20 12 

Burnet v. Thompson Oil & G. Co., 283 U. S. 301 10 

Burnet v. Houston, 282 U. S. 223 11 

Burnet v. Clark, 287 U. S. 410 12 

Busch v. Commissioner, 50 F. (2d) 800 12 

Colston V. Burnet, 59 F. (2d) 867 12 

Dalton V. Bowers, 287 U. S. 404 12 

Freuler v. Helvering, 291 U. S. 35 24 

Helvering v. Ind. Life Ins. Co., 292 U. S. 371 11 

Merriman v. Commissioner, 55 F. (2d) 879 12 

New Colonial Co. v. Helvering, 292 U. S. 435 11 

Van Dyke v. Helvering, 291 U. S. 642 12 

Statutes: 

Revenue Act of 1928, c. 852, 45 Stat. 791, Sec. 23 2 

Revised Statutes: 

Sec. 5211 (U. S. C, Title 12, Sec. 161) 21 

Sec. 5212 (U. S. C, Title 12, Sec. 163) 22 

112714—35 1 (I) 



In the United States Circuit Court of 
Appeals for the Ninth Circuit 



No. 7462 



FmsT National Bank of Dillon, Montana, 
petitioner 

V. 

Commissioner of Internal Revenue, respondent 



ON PETITION FOR REVIEW OF DECISION OF THE UNITED 
STATES BOARD OF TAX APPEALS 



BRIEF FOR THE RESPONDENT 



OPINION BELOW 

. The only previous opinion in this case is the 
memorandum opinion of the Board of Tax Appeals 
(R. 27-32) which is unreported. 

JURISDICTION 

This appeal involves income tax for the calendar 
year 1929 and is taken from the decision of the 
Board of Tax Appeals entered first on November 
17, 1933 (R. 33), and subsequently corrected on 
November 22, 1933 (R. 33). The case is brought 
to this Court on a petition for review filed on Feb- 

(1) 



ruary 5, 1934 (R. 34-40), pursuant to the provi- 
sions of Sections 1001-1003 of the Revenue Act of 
1926, c. 27, 44 Stat. 9, 109-110, as amended by Sec- 
tion 1101 of the Revenue Act of 1932, c. 209, 47 
Stat. 169, 286. 

QUESTION PRESENTED 

Whether the petitioner acquired an interest in 
1929 in a fund known as the Stockholders' Account, 
and, if so, whether petitioner should be allowed 
to make a deduction from its gross income because 
of notes in said account w^hich were found to be 
worthless and charged off as bad debts in 1929. 

STATUTE INVOLVED 

Revenue Act of 1928, c. 852, 45 Stat. 791: 

Sec. 23. Deductions from gross income. 
In computing net income there shall be al- 
lowed as deductions : 

^ * * «■ « 

(j) Bad debts. — Debts ascertained to be 
worthless and charged off within the taxable 
year (or, in the discretion of the Coimnis- 
sioner, a reasonable addition to a reserve for 
bad debts) ; and when satisfied that a debt 
is recoverable only in part, the Commis- 
sioner may allow such debt to be charged off 
in part. 

STATEMENT 

The facts as found by the Board of Tax Appeals 
(R. 27-31) and as supplemented by the testimony 
(R. 42-60) are as follows: 



The petitioner is a national bank engaged in the 
general banking business at Dillon, Montana. 
Several years before 1929, the taxable year here, 
the officers of this bank conceived the idea of creat- 
ing on its books a nonledger account from its earn- 
ings to be used in making loans which were other- 
wise not permitted by the Comptroller of the Cur- 
rency, and which would be carried in the name of 
its stockholders (R. 28). 

Pursuant to this plan, the board of directors 
passed a resolution declaring a special cash divi- 
dend of Fifty Thousand Dollars which was pay- 
able immediately. This sum was thereupon placed 
to the credit of the petitioner's stockholders in a 
new account designated "Stockholders' Account." 
This action was ratified by all of the stockholders 
in a written agreement in which they also gave the 
directors authority to add to this fund by declaring 
other special dividends from time to time as the 
directors might deem for the best interests of the 
stockholders (R. 28-29, 43). 

Prior to November 1929, whenever a sale of the 
petitioner's stock was made, the ownership, or in- 
terest, of the stockholders in the assets of the Stock- 
holders ' Account followed the sale of the stock to 
the vendee. Any transfer of stock carried with it 
the proportionate equity in assets of the petitioner 
and in the Stockholders' Account. If a stock- 
holder sold his interest, he signed nothing showing 
a transfer of his interest in the Stockholders' Ac- 



count. There were no entries on the books of the 
petitioner or stock records with reference to the 
transfer of any interest in the Stockholders' Ac- 
count. The only evidence of any change in owner- 
ship in such fund would be the transfer of the 
stock of the petitioner (R. 45). 

The stockholders had no voice, or control of the 
money, in the Stockholders' Account. Prior to 
November 1929 the fund was handled by two bank 
officials who were made trustees and were given the 
management of said fund. A record called a "con- 
trol book ' ' was maintained from the time the fund 
was set up and covered all transactions in regard to 
the fund. From time to time dividends were de- 
clared by the directors and were added to this fund 
and loans were made therefrom. The cost of the 
notes which went to make up the account was the 
face value of such notes. Income from the notes 
was distributed to the stockholders when dividends 
declared by the petitioner were paid (R. 28, 44-46). 

On November 12, 1929, the owners of 1,705 shares 
of the petitioner's stock entered into a contract 
with the Northwest Bancorporation, a holding cor- 
poration, to exchange the former 's stock in the pe- 
titioner for the stock of the holding company at 
the rate of one share of the petitioner's stock for 
8% shares of the holding company. At the time 
this contract was made, the petitioner had 2,000 
shares of stock outstanding. Before the end of 
December 1929 other shares of the stock in the pe- 
titioner were transferred to the Northwest Ban- 



corporation, but sufficient shares of the petitioner's 
stock were retained to allow the required number 
of persons to qualify as directors. In this ex- 
change the stock of the Northwest Bancorporation 
was given a value of $70 per share (R. 28-29, 48, 
52-53). 

This contract covering the exchange of stock was 
executed in counterparts and such counterparts 
were signed by the officers of the holding company 
and each stockholder who exchanged his stock. 
The portion of the contract introduced in evidence 
provides as follows (E. 48-49) : 

This agreement made and entered into 
this 12th day of November 1929, by and be- 
tween the Northwest Bancorporation, a 
Delaware corporation, hereinafter called the 
Company, party of the first part, and such 
of the shareholders in the First National 
Bank of Dillon, Montana, herein called the 
Bank, as shall become parties hereto by ex- 
ecuting this agreement, or any counterpart 
thereof, herein called the Shareholders, par- 
ties of the second part. 

Each of the Shareholders agrees that he 
will exchange the shares of stock in the 
Bank which he owns for eight and three- 
quarters shares of stock of the Company. 
In the event that any Shareholder is entitled 
to receive a fractional share of stock of the 
Company, according to the foregoing ar- 
rangement, then such Shareholder shall be 
obliged to accept cash in lieu of the frac- 



. 6 

tional share of stock, on the basis of $70 per 
share for each full share of stock of the 
Company. 

Paragraph 5. In addition to' the assets 
which are shown on the books of the Bank, 
there are certain other assets owned by the 
Bank which are carried in accounts desig- 
nated "Stockholders' Fund", "Interest Ac- 
count ", and "Charged-Off Assets ", respec- 
tively. The Shareholders agree that all such 
assets shall become assets of the Bank. 

At the time this contract was made, the Stock- 
holders' Account had a book value of $261,934.11, 
of which $9,400 represented cash and the balance 
was notes evidencing loans. In making this ex- 
change of stock, the parties to the contract treated 
the assets in the Stockholders' Account as being 
sold by the petitioner's stockholders to the Ban- 
corporation, and they allocated approximately 
$261,000 as the amount paid by the Bancorpora- 
tion for such assets. The contract also provided 
that the Northwest Bancorporation should with- 
hold from each of the petitioner's stockholders who 
joined in the exchange 1% shares out of every unit 
of each S% shares of the holding company's stock 
in order to insure performance of the contract in 
case of any depreciation of the assets. The provi- 
sions covering this part of the contract were not 
introduced in evidence by the petitioner R. 29, 
50-53, 60). 

After November 12, 1929, the bank carried the 
Stockholders' Account as a nonledger account and 



in exactly the same way in which it had been pre- 
viously handled. But since that time loans which 
have been made out of the fund have been evi- 
denced by loans payable to the petitioner and the 
petitioner has purchased property with money 
taken from this fund (R. 31, 54). 

On December 31, 1929, the board of directors of 
the petitioner charged off for the year 1929 the 
sum of $76,694.19, representing uncollectible notes 
included in the Stockholders' Account (R. 28). 
The petitioner claimed the amount of these bad 
debts as a deduction from its gross income for 1929 
in making out its income-tax return for that year. 
The Commissioner disallowed the deduction on the 
ground that it was not shown that the assets listed 
in the Stockholders' Account were the property of 
the bank or, if they were, at what value they were 
transferred to the bank (R. 12). In filing its peti- 
tion for a redetermination by the Board of Tax 
Appeals, the petitioner claimed that a deduction 
for bad debts should be allowed in the sum of 
$76,825 (R. 4). Later in the amended petition, the 
petitioner reduced the amount of the deduction 
for bad debts, stating that it acquired only 91.5 per- 
cent of the Stockholders' Account and so was en- 
titled to only 91.5 percent of $76,825, or $70,294.88 
(R. 17-18). 

The Board of Tax Appeals approved the Com- 
missioner's determination and held that there was 
a deficiency in tax for 1929 in the amount of 
$8,300.63 (R. 33). 



112714 — 35- 



SUMMARY OF ABGTJMENT 

The petitioner is claiming the right to make a 
deduction from its gross income on account of 
losses sustained from bad debts which it alleges 
were found worthless and charged off during the 
taxable year. Deductions are not a matter of right 
but are to be allowed only where they are specifi- 
cally authorized by statute, and to be deductible, 
losses must be personal to the taxpayer. This well 
established principle of tax law prevents the peti- 
tioner here from making a deduction for losses 
which were sustained by another taxpayer and that, 
we submit, is what the petitioner is attempting to 
do in the instant case. 

The debts involved here are debts belonging to 
an association known as the ** Stockholders' Ac- 
count" and were not the property of the petitioner 
in the taxable year here in question. In other 
words, it is our position that the title to the notes 
which are the evidence of these debts did not pass 
to the petitioner. We are of the opinion that the 
petitioner did not have any interest in the Stock- 
holders' Account. However, if it should be held 
that it did acquire an interest in November 1929 as 
a result of terms included in an agreement made by 
some of petitioner's stockholders to exchange their 
stock for stock in a holding company, still it is 
clear that the petitioner did not acquire title to 
these notes or to any specific assets in the Stock- 
holder's Account but received merely an indivisible 
interest in all of the assets in such Account. 



From the time of its creation in 1912 up to the 
time of this exchange of stock, the Stockholders' 
Account had been maintained as a separate asso- 
ciation and had been managed by two trustees. 
After the exchange, this Account was maintained 
exactly the same way as it had been before. The 
records of transactions were kept in the same book 
and the fund was also administered in the same 
way. It is especially significant that such Account 
was still carried on petitioner's books as a non- 
ledger account. This meant that the Account was 
not only considered by the petitioner as something 
apart from its regular and authorized banking 
business, but also that the assets in the fund were 
not treated as a part of the petitioner's assets and 
were not under the supervision of the Comptroller 
of the Currency. Obviously, the Stockholders' 
Account was meant to be and was a separate busi- 
ness. There is a further reason why this conclu- 
sion should be reached and that is, that, even if 
petitioner did acquire such interest, there were 
also others who had an interest in the Account and 
whose property rights must be considered. 

So we submit that the Stockholders' Account 
should be treated as a separate taxable entity, dis- 
tinct from the petitioner, and as the debts here 
involved belonged to the Account, the petitioner 
should not be allowed to take a deduction on ac- 
count of such debts. Accordingly, the decision of 
the Board of Tax Appeals is correct and should be 
affirmed. 



10 

ARGUMENT 

The disputed item, here involved is a deduction 
from the petitioner's gross income in the amount 
of $70,294.88 (Br. pp. 4-5). From the amended 
petition (R. 13-18) filed with the Board of Tax 
Appeals we are advised that such sum represents 
91.5 percent of $76,825, which was the total amount 
of debts ascertained to be worthless and charged 
off in 1929 on the records of a fund known as the 
''Stockholders' Account." The amended petition 
alleges further that on December 31, 1929, this 
Stockholders' Account was an asset of the peti- 
tioner to the extent of 91.5 percent, and thus in- 
dicates the reason why the petitioner is claiming 
a deduction for such debts only to that extent. 

It is respondent's position that the petitioner did 
not own the assets of the "Stockholders' Account" 
or any part thereof. But if it should be held that 
the petitioner did not have an interest in such Ac- 
count, we think it is clear that such interest was 
not in any particular asset but that it was merely 
an undivided interest in the whole, that the debts 
involved belong to the Stockholders' Account, an 
entity entirely distinct from the petitioner, and so 
the latter can make no deduction on account of a 
loss which may have been sustained by the Account, 

It is well settled that a taxpayer is not entitled 
to a deduction as a matter of right, and may have 
only such deductions as are specifically authorized 
by statute (Burnet v. Thompson Oil <f G. Co., 283 



11 

XJ. S. 301). It follows that the burden of proof is 
on the taxpayer to establish his right to the deduc- 
tion claimed (Burnet v. Houston, 282 U. S. 223, 
227 ; Helvering v. Ind. Life Ins. Co., 292 U. S. 371, 
381). Also it is equally well established that de- 
ductions for losses will be allowed only to the ex- 
tent that the losses have been personally sustained 
by the taxpayer. In commenting on this recently 
in New Colonial Co. v. Helvering, 292 U. S. 435, 
the Supreme Court said (p. 440) : 

Whether and to what extent deductions 
shall be allowed depends upon legislative 
grace; and only as there is clear provision 
therefor can any particular deduction be 
allowed. 

* * ^ * * 

Not only so, but the statutes have dis- 
closed a general purpose to confine allow- 
able losses to the taxpayer sustaining them, 
i. e., to treat them as personal to him and 
not transferable to or usable by another. 
(Italics supplied.) 

Obviously, therefore, a taxpayer seeking 
a deduction must be able to point to an ap- 
plicable statute and show that he comes 
within its terms. 

By referring to losses which have been person- 
ally sustained, we do not mean a loss sustained by 
some other entity which may indirectly affect the 
taxpayer. If that were sufficient, then every loss 
sustained by a corporation would be deductible 



12 

from the gross income of its stockholders, for theo- 
retically at least every loss has some effect on the 
dividends declared by a corporation. But the reve- 
nue statutes have never allowed deductions on such 
a basis. For tax purposes, the business affairs of 
each entity are to be treated separately and deduc- 
tions are to be allowed only for losses personal to 
the entity sustaining them. For full exposition 
and approval of this principle see Bolton v. Bow- 
ers, 287 U. S. 404; Burnet v. Clark, 287 U. S. 410; 
Ycm Byke v. Helvering, 291 U. S. 642 ; Colston v. 
Burnet, 59 F. (2d) 867 (App. D. C.) ; Merriman 
V. Commissioner, 55 F. (2d) 879 (C. C. A. 1st). 

This rule as to deductions has also been applied 
in the case of an association or trust and prevents 
those interested therein as beneficiaries or other- 
wise, from taking deductions which the statute has 
allowed to the association or trust (Anderson v. 
Wilson, 289 U. S. 20; Busch v. Com^missioner, 50 
F. (2d) 800 (C. C. A. 5th)). It is our contention 
here that the Stockholders' Account falls within 
the category of an association or a trust and that 
the petitioner, if it had any interest in such Ac- 
count, was merely the holder of a beneficial interest 
therein and owned no assets outright. But inas- 
much as we think it doubtful that the petitioner 
acquired any interest at all in the Stockholders' 
Account, we wish first to call attention to the nature 
of its claim and the facts which negative its con- 
tention of ownership. 



13 

It is admitted by the parties that the petitioner- 
did not have any interest in the Stockholders' Ac- 
count prior to the exchange of stock on November 
12, 1929. Up to that time, ownership in such Ac- 
count was determined by the stock ownership in the- 
First National Bank of Dillon, the petitioner here.. 
Any transfer of stock in the bank carried with it 
the stockholder's proportionate interest in the- 
Stockholders' Account (R. 45, 60). Then, on No- 
vember 12, 1929, stockholders owning 1,705 shares 
of the petitioner 's stock signed an agreement along 
with the officers of the Northwest Bancorporation. 
whereby the former's stock was to be exchanged 
for stock in the latter company. Later a few other 
stockholders also exchanged their stock before the- 
end of 1929. 

According to the petitioner's allegations in its 
amended petition (R. 17), it appears that this ex- 
change of stock gave the Northwest Bancorpora- 
tion 91.5 percent of the petitioner's stock. Also as 
it had always been recognized that a stockholder's 
interest in the Stockholders' Account was trans- 
ferred when bank stock was transferred, it should 
follow that the Northwest Bancorporation acquired 
an interest in the Account amounting to 91.5 per- 
cent of the whole. But it is contended that, in- 
stead of that being the case here, the petitioner ac- 
quired the assets of the Account. In its amended 
petition, the petitioner asserts (R. 17) that it ac- 
quired these assets to the extent of 91.5 percent but. 



14 

in its brief it contends (Br. 4, 5, 8-9) that it ac- 
quired title to all of the assets yet it continues to 
claim a deduction amounting to only 91.5 percent 
of the bad debts charged off. These two positions 
are of course inconsistent but as some of the stock- 
holders retained their interests in the Stockholders' 
Account, it is obvious, at the outset, that the peti- 
tioner must concede that, whatever its interest was, 
it did not become the owner of all the assets in the 
Account. 

However, we do not concede that the petitioner 
got any interest in the Account. Instead we think 
it is clear that it did not get an interest therein. 
The petitioner's claim seems to be based primarily 
•on the statement in the exchange agreement that 
"The Shareholders agreed that all such assets shall 
become assets of the Bank" (R. 49). We submit 
that under the circumstances here, such language 
did not amount to an assignment of any interest to 
the petitioner. We are of this opinion even though 
it is assumed as counsel for petitioner contends 
(Br. 11) that it is not necessary for any particular 
form to be followed in making an assignment. 
Form may not be important, yet it is necessary to 
show that the assignors are in a position to make 
an assignment, have intended to make one, and did 
in fact do so. Where, as here, a fund is being ad- 
ministered by the same persons and in the same 
manner after the alleged assignment as it was be- 
fore, there must be convincing evidence of an as- 



15 

signment in order to show that property rights 
have been transferred. 

It has already been pointed out that, although 
the agreement stated that ' ' The Shareholders agree 
that all such assets shall become the assets of the 
Ban*k" (R. 49), some of the shareholders did not 
join in the agreement but retained their interests 
in the Account. Thus it is evident that this state- 
ment can only mean that part of the shareholders 
agreed and, as the latter could not legally transfer 
what they did not own, it could only mean, even 
when construed in the most favorable light for the 
petitioner, that there was an intention to transfer 
the interests which the parties to the agreement 
owned. But actually these shareholders did not 
assign or make such a transfer to the petitioner. 
So it appears that the statement in the agreement 
is nothing more than an expression of the willing- 
ness of certain shareholders to have the assets 
turned over to the bank. But in so stating, we do 
not concede that these shareholders ever owned the 
assets of the Account or were in a position to turn 
them over to the bank. 

There is the best of reasons for contending that 
the shareholders who were parties to the exchange 
actually did not assign any interests which they had 
in this Account to the petitioner and that is, that 
they sold such interests to the Northwest Bancor- 
poration. Obviously, if such interests were sold to 
that company by the shareholders, the latter could 



16 

2iot also give them away to the petitioner, and it 
is not contended that the petitioner ever paid any 
.consideration for its alleged interest in the 
Account. 

Moreover, it cannot be disputed that the share- 
holders did transfer their interests in the Account 
to the holding company. The evidence shows that 
in determining the consideration for the exchange, 
the parties not only estimated the value of the peti- 
tioner's assets but also the assets in the Stockhold- 
^ers' Account. The Comptroller of the Northwest 
Bancorporation referred (R. 50) to the considera- 
tion paid by that company for the shareholders' 
interests in such Account and another witness 
spoke (R. 60) of such interests as being sold by 
the shareholders to that company. Also the terms 
of the exchange agreement indicate that the North- 
west Bancorporation did pay a valuable considera- 
tion for the shareholders ' interests in the Account. 
While the petitioner refused to introduce all of 
this agreement in evidence, the portion in the rec- 
ord! (R. 48-49) indicates that the holding com- 
pany's stock was being exchanged for a value of 
$70, and that 8% shares of its stock would be given 
for one share of bank stock. This made a share of 
bank stock worth $612.50, or a value for the 1,705 
shares turned in on November 12, 1929, of over a 
million dollars, yet the bank's entire assets were 
estimated as being worth only about $678,653.31. 
So it is apparent that the shareholders were includ- 



17 

ing their interests in the Stockholders ' Account in 
estimating the value of the property exchanged, 
and, since they could not take two inconsistent po- 
sitions as to the same property, we must conclude 
that they sold their interests to the holding com- 
pany and did not give them to the petitioner. 

On the other hand, there is no showing that the 
Northwest Bancorporation after paying for these 
interests in the Stockholders' Account, ever made 
an assignment of such interests to the petitioner. 
If it had done so, such an assignment to the peti- 
tioner should have been treated as a contribution 
of capital. But the assets of the Stockholders' Ac- 
count have never been treated as part of the capi- 
tal of the petitioner, and as a national bank, the 
petitioner has no right to hold such assets unless it 
reports them as a part of its bank assets, and brings 
them under the control of the banking authorities. 
This will be more fully discussed further on in 
■connection with banking requirements. 

In urging our contention, we have not overlooked 
the fact that after November 12, 1929, the peti- 
tioner's officers were allowed to spend money from 
the fund for a bank building and for an attorney 
in litigation involving the bank (R. 54), but if the 
persons interested in the fund did not object, as 
apparently they did not, the petitioner could use 
this money and still not have legal title to the Ac- 
count. There is a further fact to be considered. 
At the time that the exchange was effected, the 
holding company retained 1% shares out of every 



18 

unit of 8% shares of its stock which it had agreed 
to transfer to the stockholders. This, according 
to petitioner's witness (R. 52), was to guarantee 
the holding company against loss if the interests 
it acquired in the Stockholders' Account and two 
other special accounts should not prove to be as 
valuable as the parties estimated they would be. 
If the petitioner had acquired these assets as it 
contends that it did then, of course, the guarantee 
should have run to the petitioner, but actually it 
was the holding company which got the protection.^ 
Accordingly, when all of the facts are considered, 
we are of the opinion that the petitioner did not 
acquire any interest in the Stockholders' Account. 
However, if it should be held that the petitioner 
did acquire an interest either from the stockholders 
who were parties to the exchange or from the 
Northwest Bancorporation, we submit that it did 
not acquire title to any specific assets or get any- 
thing but an undivided interest in the whole Ac- 
count. The petitioner contends that its interest in 
the Account came to it as a result of the exchange 
of stock by some of its shareholders and the North- 
west Bancorporation and is directly traceable to 



^ The Board of Tax Appeals was of the opinion (R. 31) 
that the petitioner was (guaranteed and should not be 
allowed to recover for that reason. While the testimony 
(R. 51-52) is not entirely clear and all of the contract is not 
in the record, we are doubtful if there are sufficient facts to 
su})poi't that conclusion. However, the Board's holding in 
that respect is immaterial since there is sufficient basis for 
its decision on other grounds. 



19 

the statement in the contract that the assets of the 
Account should become the assets of the petitioner. 
In this connection it should be noted that the con- 
tract covering the exchange was executed in coun- 
terparts (R. 48). Thus each shareholder who was 
a party to the exchange signed a separate counter- 
part and acted only for himself. Consequently, 
as these shareholders acted individually and not as 
a unit, and as still other shareholders were not par- 
ties to the agreement, there is no support for the 
contention that what the former shareholders did 
amounted to a legal transfer of title to the assets 
in the Stockholders' Account. All that the share- 
holders who joined in the exchange did, or could 
do legally, was to transfer what they individually 
owned, and that was merely an undivided interest 
in the whole and not title to the assets or any part 
thereof. 

The petitioner is really not in a position to con- 
tend otherwise. It must concede that it did not 
become the sole owner of the Stockholders' Ac- 
count after the exchange, even if it acquired an 
interest, and it cannot point to any distribution of 
assets among the claimants. In fact, the evidence 
shows the contrary (R. 44). The assets in the Ac- 
count were not divided between the shareholders 
before the exchange nor was there any individual 
set-up on the records of the Account. It is also 
true that there has been no division of assets be- 
tween the petitioner and the other interested par- 



20 

ties since the exchange, nor any recognition of in- 
dividual interests. At all times, both before and 
after the exchange, the assets in the Account have 
been treated as belonging to one fund and being 
the assets of an Association which is an entity en- 
tirely separate from the bank. 

Accordingly, if the petitioner got anything from 
the Shareholders, or from the Northwest Bancor- 
poration, which of course got only what the share- 
holders had, its interest was only an undivided in- 
terest in all of the assets of the Account and was 
not unlike the interest a stockholder gets in a cor- 
poration. Undoubtedly it will be conceded that 
this was true of the stockholders' interests in the 
Account before the exchange and as the exchange 
did not effect a dissolution or bring about any 
change in the character or administration of the 
Account it was also true afterwards. 

The whole set-up of the Account was the same 
after the exchange as it was before and the whole 
fund was kept entirely separate from the petition- 
er's banking business. The records of loans made 
for the Account were kept in the same book as 
they formerly were and were made by the same 
officers acting still as trustees for the fund. It was 
stated that the notes for new loans were made to 
nm to the bank (R. 54) but if this was a different 
practice (and we are not told whether it was or 
not) the bank continued to handle the money as a 
fiduciary and not as a company owning the money 



21 

outright. That such is true is also shown by the 
fact that this Account was still carried on the peti- 
tioner's books as a nonledger account. The latter 
fact is of special significance. 

As a national bank, the petitioner is strictly- 
limited by its charter as to what business it may 
transact, and is under the close supervision of the 
Comptroller of the Currency. Realizing that loans 
of the kind made by the trustees administering the 
Stockholders' Account, could not be handled by a 
national bank, the petitioner's stockholders had set 
up this fund in 1912 to be operated separately from 
the bank (R. 44). From that time up to and in- 
cluding all of the taxable year 1929, this Account 
was carried as a nonledger account which meant 
that it was in no way under the supervision of the 
Comptroller of the Currency, and was not included 
in the reports required by the banking laws. In 
these reports, there must be included a detailed and 
accurate statement of the bank's assets and lia- 
bilities, and also of the net earnings and dividends 
declared. (For banking requirements applicable 
here see below."") 

^ As to bank examinations and reports, the following re- 
quirements appear in the Kevised Statutes, Section 5211, as 
amended by the Act of February 27, 1877, c. 69, § 1, 19 Stat. 
252, and the Act of December 28, 1922, c. 18, 42 Stat. 1067 : 

" Every association shall make to the Comptroller of the 
Currency not less than three reports during each year, ac- 
cording to the form which may be prescribed by him, 
verified by the oath or affirmation of the president or cashier 
of such association, and attested by the signature of at least 



22 

At no time did the petitioner ever make such 
reports or consider it necessary to do so as to this 
Account, yet if the assets of the Stockholders' Ac- 
count were part of the petitioner's assets as it is 
contended (R. 9) the petitioner has violated the 
banking laws in not including them in its report 
or in allowing the loans from this fund to be under 
the supervision of the Comptroller of the Currency 
and subject to examination. Certainly the peti- 
tioner will not admit that it has violated the bank- 
ing laws but will explain that it has omitted the 
Stockholders' Account from its bank reports be- 
cause it has not considered such Account, even 
since November 12, 1929, as a part of its banking 
business. If the Account is not a part of the peti- 
tioner's regular business then it is another entity 
and must be so considered for tax purposes. This 



three of the directors. Each such report shall exhibit in 
detail and under appropriate heads, the resources and lia- 
bilities of the association at the close of business on any past 
-day by him specified, and shall be transmitted to the comp- 
troller within five days after the receipt of a request or 
requisition therefor from him, and in the same form in 
which it is made to the comptroller shall be i)ublished in a 
newspaper published in the place where such association 
is established, * * * " (U. S. C, Title 12, Sec. 161). 

As to reports on dividends and net earnings, the Revised 
Statutes, Section 5212, provide: 

" In addition to the reports required by the preceding 
section, each association shall report to the Comptroller of 
the Currency, within ten days after declaring any dividend, 
the amount of such dividend, and the amount of net earnings 
in excess of such dividend. Such reports shall be attested 
by the oath of the president or cashier of the association." 



23 

is exactly the way the petitioner has treated it and 
this cannot be denied. 

In addition to the facts already referred to, 
there is also other evidence that the petitioner, 
even after the exchange, has looked upon the Stock- 
holders ' Account as an association. This is shown 
in the amended petition in which it is alleged (R. 
16) that from the year 1912, the Stockholders' Ac- 
count has been treated for tax purposes as ''An 
Association" and that the petitioner and such as- 
sociation have filed consolidated income tax re- 
turns. The Commissioner rejected the petitioner's 
request to file a consolidated return for 1929 but,, 
although the petitioner first alleged that to be an 
error (R. 16), it has abandoned the point so we 
are not concerned with the merits of such a conten- 
tion. However, the fact that the petitioner did 
make such a request indicates that it actually con- 
sidered the Stockholders' Account to be an associ- 
ation and a separate entity. 

As a separate entity, the Stockholders' Account 
holds title, of course, to its own assets, and any 
person who has an interest therein has, as we have 
already explained, only an undivided interest in 
the whole. Accordingly, the interest which the 
petitioner acquired, if any, was not an interest in 
any particular assets but an undivided interest in 
the whole. This means that the petitioner did not 
have title to the bad debts which were charged off 
or to any part thereof. Instead title was in the 



24 

Stockholders' Account and the manner in which 
the petitioner's officers have administered this Ac- 
count precludes the petitioner from denying the 
Account's title to these debts. Not having title to 
the debts, the petitioner cannot make a deduction 
on account of any found to be worthless because 
the loss is not a personal one to the petitioner and 
it must be in order to make the deduction. The 
trustees who administer the Account may, of 
course, make whatever deductions the statute al- 
lows other taxpayers {F renter v. H elver ing, 291 
U. S. 35, 41), but the privilege is not extended to 
persons like the petitioner who are merely holders 
of beneficial interests. 

The idea of recognizing associations and trusts 
as separate entities for tax purposes is well estab- 
lished. In discussing this principle in Anderson 
v. Wilson, supra, the Supreme Court said (p. 27) : 

In so ruling we do not forget that the 
trust is an abstraction, and that the economic 
pinch is felt by men of flesh and blood. Even 
so, the law has seen fit to deal with this ab- 
straction for income tax purposes as a sepa- 
rate existence, making its own return under 
the hand of the fiduciary and claiming and 
receiving its own appropriate deductions. 
* * *, These and other cases bear witness 
to the rule that an equitable life tenant may 
not receive a deduction for the loss of capital 
assets of the trust, though the result of such 
a loss is a reduction of his income. 



25 

From the foregoing, we think it is evident that 
the petitioner is not entitled to a deduction for the 
debts here involved. 

CONCLUSION 

The decision of the Board of Tax Appeals should 
be affirmed. 

Frank J. Wideman, 
Assistant Attorney General. 
Sew ALL Key, 
J. Louis Monarch, 
Louise Foster, 
Special Assistants to the 

Attorney General. 
February 1935. 



U. I. 80VERNMENT PRINTING OFFICE: 19SB 



United States Circuit Court of Appeals 

FOR THE NINTH CIRCUIT. 
No. 7462. 



First National Bank of Dillon^ Montana, 

Petitioner, 
vs. / 

Commissioner op Internal Revenue^, 

Respondent. 



On Petition for Review of Decision of the United States 
Board of Tax Appeals. 



PETITIONER'S SUPPLEMENTAL AND REPLY BRIEF. 



Peter S. Rask, 
P. J. Coffey, 
lOJfS Northwestern Bank Building, 

Minneapolis, Minnesota, 
T. E. Gilbert, 
Dillon, Montana, 
Attorneys for Petitioner. 

Hayward Brief Co., 601-7 Fourth Ave. So., Minneapolis 



TABLE OF CASES. 

Page 

Greenleaf on Evidence, 16 Ed., Volume I, Par. 186 3 

Jones' Commentaries on Evidence in Civil Cases, Vol. II, Section 

257 4 

King Hardware Co. vs. J. G. Christopher Co., et al., 222 Fed. 224. . 4 

Pacific Railway vs. Ketchum, 101 U. S. 289-296, 25 L. Ed. 932. . . 3 

1224, Title 26, U. S. C. A., (a), (d) 1 



United States Circuit Court of Appeals 

FOR THE NINTH CIRCUIT. 

No. 7462. 



First National Bank of Dillon, Montana, 

Petitioner, 

vs. 

Commissioner of Internal Revenue, 

Respondent. 



PETITIONER'S SUPPLEMENTAL AND REPLY BRIEF. 



Since this case was decided by the Board of Tax Appeals 
and appeal taken, the petitioner and appellant herein, on 
March 9th, 1034, paid to respondent the tax of |8,300.63, and 
accrued interest of |1,961.56, a total of |10,262.19. This sum 
was in payment of the tax in question, and in the event the 
Circuit Court of Appeals reverses the Board of Tax Appeals, 
the petitioner seeks the Order of this Court directing the 
respondent to refund the tax under the provisions of the 
following statute: 

■Section 122Jf, Title 26, U. 8. C. A. 

"1224. Review of board's decision; rules; operation 
of review as stay of assessment, and so forth; disallow- 
ance of deficiency; effect. 

"(a) The decision of the board rendered after Feb- 
ruary 26, 1926 (except as provided in subdivision (j) 
of section 1064 and subdivision (h) of section 1118 of 



this title), may be reviewed bv a Circuit Court of Ap- 
peals, or the Court of Appeals of the District of Colum- 
bia, as hereinafter provided, if a petition for such review 
is filed by either the commissioner or the taxpayer with- 
in three months after the decision is rendered. (As 
amended June 6, 1932, 5:00 p. m., c. 200, Par. 1101 (a), 
47 Stat. 286.) 

"(d) In cases where assessment or collection has not 
been stayed by the filing of a bond, then if the amount 
of the deficiency determined by the board is disallowed 
in whole or in part by the court, the amount so dis- 
alloAved shall be credited or refunded to the taxpayer, 
without the making of claim therefor, or, if collection 
has not been made, shall be abated." 

Certain assertions have been made as statements of fact in 
the brief for the respondent, which should not go unclial- 
lenged, and the appellant desires briefly to call certain of 
them to the attention of the court. 

In respondent's brief, page two (2), appears the follow- 
ing: 

"Question Presented. 
"Whether the petitioner acquired an interest in 1029 
in a fund known as the Stockholders' Account, and, if 
so, whether petitioner should be allowed to make a de- 
duction from its gross income because of notes in said 
account wiiich were found to be worthless and charged 
off as bad debts in 1929." 

We submit that the respondent has limited the defense 
issue to the question: Did the petitioner own the assets 
which came into the bank from the Stockholders' Account 
in the acquisition by the Northwest Bancorporation? (R. 
58-59). 



(Mr. Leinenkiigel ) 

"And if petitioner owned those assets as of Decem- 
ber 31st, 1929, why, of course, it would be entitled to 
the deduction." 

(Mr. Rask) 

"Well, then, I do not presume there is any further 
need of making further proof on the worthlessness of the 
assets." 

(The Member) 

"No. The matter seems to resolve itself now into a 
question of law, or a mixed question of fact and law, as 
to who OA^Tied these notes when they were charged off; 
and you have got all of your evidence on that phase of 
it, have you not?" 

(Mr. Rask) 

"Yes." 

Concerning admissions in open court, the Supreme Court 
has said this : 

"A solicitor may certainly consent to whatever his 
client authorizes, and in this case, it distinctly appears 
of record that the company assented through its solici- 
tor. This is equivalent to a direct finding by the court 
as a fact that the solicitor had authority to do what 
he did, and binds us on appeal so far as the question is 
one of fact only." 

Pacific Railmay v. Ketclium, 101 U. S. 289-296, 25 

L. Ed. 932. 
(See Admissions of Attorneys, Greenleaf on Evi- 
dence, 16 Ed., Volume I, Par. 186. ) 

"An attorney or solicitor may consent to whatever his 
client authorizes. His authority from the client to make 
an agreement in the latter's behalf will be assumed in an 



appellate court in the absence of any evidence in the 
record to tlie contrary or that it was questioned in the 
trial court.'' 

King Hard ir are Co. v. J. G. Chrisiopher Co., ef r//., 
222 Fed. 224. 

"It is essential to the orderly conduct of business in 
the courts that attorneys who stand in the place of their 
clients should frequently make formal admissions of the 
character already mentioned; and if made in the pres- 
ence of the court it is immaterial whether they be oral 
or written or whether they be express or plainly in- 
ferred from the conduct on which the opposite attorney 
and the court have the right to rely; and in such cases 
the admissions and acts of the attorney are to be treated 
as those of the client ; and are conclusive upon him, un- 
less fraud or collusion is shown." 

Jones' Commentaries on Evidence in Civil Cases, 
Vol. II, Section 257. 

The board member, in his decision, entirely ignored the 
issue as so limited, that is, whether or no the assets became 
the property of the petitioner. Noav, new counsel on api)eal, 
attempts to repudiate the limited issue, and to present a new 
issue, to-wit: That the Stockholders' Account was properly 
taxable as an association or separate taxable entity for the 
full year 1920. That nothing happened to the Stockholders' 
Account in 1920, except that the ownersliip of tlie account 
itself changed, hence, by inference, he argues that Stock- 
liohlers' Account ownefl said notes charged off, at the time 
charged off, and that Stockhoklers' Account only is entitled 
to the deduction. 

Appellant contends that the mixed question of law and 
fact must ('(mtrol the case. In other words, that DO. .5 per 



cent of the bad notes charged off were owned by appellant 
at the time charge off was made. 

Counsel for respondent, in his brief, has failed to discuss 
the facts and law concerning the transfer of these assets to 
the appellant, and has devoted the major part of his brief to 
matters beyond and outside of the questions at issue. 

On pages six (6) and seven (7) of respondent's brief, he 
says : 

"After November 12th, 1929, the bank carried the 
Stockholders' Account as a non-ledger account and in 
exactly the same way in which it had been previously 
handled." 

This is clearly a misstatement of fact. This account, os an 
account^ was never considered a non-ledger asset of the bank 
prior or subsequent to November 12th, 1929. Prior to No- 
vember 12th, 1929, the Stockholders' Account was a cus- 
tomer, or depositor, of the bank. 

The record discloses the following evidence supporting 
this statement. Mr. Gilbert, testifying concerning the ac- 
count prior to November 12th, 1929, says : "Only one ac- 
count was carried (in the bank) evidencing the money on 
hand" (E. 44-45). 

Subsequent to November 12th, 1929, the bank owned 96.5 
per cent of the assets of Stockholders' Account, which were 
carried by the bank as non-ledger assets (R. 48-49-50-51-54) . 

The Northwest Bancorporation bought and paid for the 
assets of this fund, at least to the extent of ninety-six and 
5/lOths (96.5) per cent, that is, nineteen hundred and thirty 
(1,930) shares out of two thousand (2,000) shares (R. 48). 
The Bancorporation did not buy the interest in Stockholders' 
Account owned by the prior stockholders, but bought the 
assets, and the Bancorporation, in its acquisition, and the 



6 

stockholders, agreed: ''The shareholders agree that all such 
assets shall become assets of the hank'' (R. 49). 

Respondent says, on page seven (7), that the fund was 
handled in the same way in which it had been previonsly 
handled. The evidence does not warrant such a statement. 
The assets did not become non-ledger assets of the bank nntil 
the contract of acquisition was accomplished on November 
12th, 1929. 

The record discloses the following undisputed testimony 
with respect to the assets of this fund, subsequent to Novem- 
ber 12th, 1929 : 

"The assets of Stockholders' Account have never been 
treated by the Northwest Bancorporation as assets or 
property of the Northwest Bancorporation. The assets 
of Stockholders' Account have been treated by the 
Northwest Bancorporation, since November 12th, 1929, 
just the same as the Capital structure of the Bank. The 
assets of Stockholders' Account, subsequent to the acqui- 
sition of petitioner's stock by Bancorporation, were car- 
ried on petitioner's books as non-ledger assets of peti- 
tioner" (R. 50-51). 

"The assets of Stockholders' Account since Novem- 
})er 12th, 1929, have l>een treated by petitioner as assets 
of petitioner. Loans have been made out of the fund 
since the acquisition, running into a material amount. 
The notes evidencing the loans being made payable to 
the petitioner Bank. The Bank ])urchased property on 
which site its neAV bank building was erected, which 
site was purchased with money taken from this fund. 
The sum of Six Thousand (10,000.00) has been used 
from the funds of Stockholders' Account to pay at- 
torneys' fees for services rendered in connection with 
litif/ation against the hank. The hank has had posses- 



sion of these assets, hooks, notes, and records of K^tock- 
holders' Account since the consolidation. 

''The assets of Stockholders' Account were carried on 
the hooks of the hank, heing treated as non-ledger assets 
of the hank'' (R. 54). 

These facts considered with the terms of the contract it- 
self, certainly establish conclusively that the Northwest Ban- 
corporation purchased the assets, paid face value therefor, 
and in the same operation, transferred, or paid them into 
the capital structure of the petitioner, First National Bank 
of Dillon. 

Again, on page nine (9), respondent says: 

"It is especially significant that such Account was 
still carried on petitioner's books as a non-ledger ac- 
count." 

It was desirable that the assets be "ear-marked" for ac- 
counting purposes, in order that a record be kept of the 
interest in the assets of the seventy (70) qualifying di- 
rectors' shares, and for this reason, a record was kept in the 
same book (R. 53-54). How can it be said that these assets, 
at least to the extent of 96.5 per cent, did not pass to the 
bank? 

On page nine (9) of respondent's brief, respondent's coun- 
sel further states : 

"This meant that the Account was not only considered 
by the petitioner as something apart from its regular 
and authorized banking business, but also that the as- 
sets in the fund were not treated as a part of the peti- 
tioner's assets and were not under the supervision of the 
Comptroller of the Currency." 

This statement is unwarranted, and is without any sup- 



8 

port whatever in the record. The testimony of both the 
comptroller of the Bancorporation and the president of peti- 
tioner bank discloses that the assets of this fnnd were treated 
as assets of the petitioner bank, and as a part of the capital 
structure of the petitioner bank, subsequent to November 
12th, 1929 (R. 50-51). 

Further evidence of the ownership by the bank of the as- 
sets in question appears on R. 56, wherein the president 
testifies, as to the period between November 12th, 1929, and 
December 31st, 1929, that the notes in question were charged 
off (R. 57). 

"I told you that these notes, I would say were good 
and in the assets of the bank until they were charged 
off and determined to be bad ;'' 

Respondent, on page fourteen (14) of its brief, contends 
that these bad debts could not be charged off by petitioner 
unless wholly owned, that is, that l)y reason of the fact that 
petitioner claims only 91.5 per cent of the bad debts chaiged 
off as a deduction (the testimony shows 96.5) that the deduc- 
tion cannot be taken. Counsel submits no authority to bear 
out his proposition. As a simple illustration of its fallacy, 
let us assume that two persons owned a note amounting to 
175,000.00, one of them owned 96.5 per cent, and the other 
owned 3.5 per cent. Assume further that this note became 
entirely worthless during the taxable year, and was pi-operly 
charged off on the books of each of these taxpayers. Certain- 
ly the individual owning 96.5 per cent of the note would be 
entitled to a deduction, as a bad debt, to the extent of 96.5 
per cent of |75,000.00. The statute authorizes the de<lu('tion 
of bad debts under certain circumstances, and we believe 
that he would be entitled to charge ofl his proportionate 
interest in Ihis note. 



9 

We submit that respondent's contention that the fact that 
the bank did not become the owner of all the assets in the 
acconnt, does not preclnde a dednction arising ont of bad 
debts. 

Kespondent's counsel further says in his brief, pages fif- 
teen (15) and sixteen (16) : 

"Obviously, if such interests were sold to that com- 
pany by the shareholders, the latter could not also give 
them away to the petitioner, and it is not contended that 
the petitioner ever paid any consideration for its al- 
leged interest in the account." 

It is true that no consideration for the assets passed be- 
tween the bank and the Northwest Bancorporation. In fact, 
however, the Bancorporation did contribute all of these as- 
sets directly to the petitioner bank, as disclosed by the testi- 
mony of the comptroller of the Northwest Bancorporation, 
and the agreement of acquisition, wherein the Northwest 
Bancorporation, in acquiring the stock, agreed that all assets 
of this account should become assets of the bank. It was a 
contribution by the Bancorporation to the petitioner, its 
affiliate bank, or paid in surplus. Should this defeat the 
right to take the charge off? We think not. The testimony 
shows indisputedly that the Bancorporation paid face value 
for these notes. Let us assume that the Bancorporation paid 
into the bank |261,000.00 in cash on November 12th, 1029, 
with instruction to carry said sum as a non-ledger asset, and 
that the bank, on that date, made loans precisely to the same 
borrowers as are debtors herein, and that on December 31st, 
1929, they ascertained |76,000.00 of these notes to be bad 
and charged them off. Could it then be claimed that the 
petitioner would not be entitled to the deduction? If so, 
wherein lies the distinction between the contribution of 



10 

1201,000.00 of cash and notes, and the paying in of |261,- 
000.00 in cash? 

On page sixteen (16) of respondent's brief, counsel adapts 
the language of the Board of Tax Appeals, and says : 

"While the petitioner refused to introduce all of this 
agreement in evidence, the portion, etc." 

The word "refused" is hardly warranted by the testimony. 
The exhibit was present, and if any part of it Avas beneficial 
to respondent, they could have offered the exhibit. 

A further misstatement appears in the same paragraph : 
"This made a share of bank stock worth 1612.50, or 
a value for the 1,705 shares turned in on November 12, 
1929, of over a million dollars, yet the bank's entire as- 
sets were estimated as being worth only about |678,- 
653.31." 

This is clearly wrong. The capital, surplus, and undivided 
profits alone of the bank was |495,266.29 (R. 53), exclusive 
of the non-ledger assets and deposits ; the total assets of the 
bank exceeded four million dollars. 

We do not contend that the old former shareholders gave 
these non-ledger assets to the bank. The assets were bought 
at face value by the Northwest Bancorporation, and paid 
into the bank in the same transaction, in wliich the North- 
west Bancorporation acquired the stock. 
On page seventeen (17), respondent says: 

"The assets of the Stocklioldcrs' Account have never 
been treated as part of the capital of the petitioner, and 
as a national bank, petitioner lias no right to hold such 
assets unless it reports them as a ])art of its bank assets 
and brings them under the control of the banking au- 
thorities." 



11 

The first portion of this sentence is directly contrary to 
the testimony of Mr. Mactavish, the comptroller of the 
Northwest Bancorporation, and Mr. Gilbert, the president 
of the bank, and there is no testimony whicli would warrant 
any finding that the assets have not been treated as a part of 
the capital strnctnre of the petitioner. 

The latter portion of counsel's statement is not warranted 
by any testimony, nor by the existing situation as to na- 
tional banks. We are informed by national bank examiners, 
and bankers of wide knowledge and reputation, that prac- 
tically every national bank has non-ledger assets, including 
real estate, notes, and sometimes cash items, which are not 
disclosed in its published statement. This fact certainly 
does not preclude them from being assets of the bank and 
owned by the bank, and to be sure, the comptroller of the 
currency has the duty of supervising all assets owned by 
the bank to the end that the depositors, first, and then the 
stockholders, are protected. 

On pages seventeen (17) and eighteen (18), respondent's 
counsel refers to the retention by the Bancorporation of 1% 
shares out of each unit of 8% shares, and has this to say : 

"This, according to petitioner's witness (R. 52), was 
to guarantee the holding company against loss if the 
interests it acquired in Stockholders' Account, and two 
other special accounts, should not prove to be as valu- 
able as the parties estimated they would be. If the 
petitioner had acquired these assets as it contends that 
it did then, of course, the guarantee should have run to 
the petitioner, but actually it was the holding company 
which got the protection." 

Respondent's counsel apparently sees the error of the 
Board of Tax Appeal's opinion (R. 31), and in his notes 



12 

(Br. 18), states that the board's holding in this respect is 
immaterial, since there is sufficient basis for its decision on 
other grounds. A reference to the record itself (R. 48-49- 
50-51-52) should disclose that this guarantee is not ambigu- 
ous or complicated. Here are the facts. The Northwest 
Bancorporation entered into a contract with the stock- 
holders of the bank to acquire their stock and assets of 
Stockholders' Account. "We held back 1% shares of stock 
on the 8% shares. We gave outright the seven, and held 
that much back for the performance of the contract, that 
there would be released that amount of money from these 
accounts" (E. 52). 

"Q. Now, is it not a fact that your contract also pro- 
vided that the Stockholders' Account that you pur- 
chased, would have to return so much? 

"A. Yes, sir. 

"Q. And that Avas also true of the assets of the bank 
proper, was it not? 

"A. Yes, sir." 

In other words, the consideration to be paid by the pur- 
chasers of petitioner's stock was to be dependent upon the 
liquidation of not only the assets in Stockholders' Account, 
but all of the assets of the bank. This guarantee did not 
affect the bank in any way. The l)ank itself was not a party 
to it. In this connection, it should be noted that the board 
bottomed its decision on this so-called guarantee, and made 
no finding whatever on the (piestion as to whetlier or not 
these assets became the property of (he ixMitiouer bank. 

On page twenty (20), respondent makes the bald assertion 
lliat the assets of the Stockholders' Fund constitute an en- 
tity entirely separate from the bank, and in the same sen- 
tence, makes tlie following incorrect assertion: 



13 

"At all times, both before and after the exchange, the 
assets in the Account have been treated as belonging to 
one Fund, and being the asset of an association which is 
an entity entirely separate from the Bank." 

Counsel points to no testimony which supports this asser- 
tion, and there is none. 

On page twenty (20) of his brief, counsel further asserts: 
That petitioner will concede that the exchange did not effect 
a dissolution or bring about a change in the character or 
administration of the account. We do not so concede. Cer- 
tainly, if an association existed prior to the acquisition, it 
was dissolved when stockholders, owning 96.5 per cent inter- 
est therein, sold to the Northwest Bancorporation their 
assets in said account, and immediately, by the terms of the 
contract, the Northwest Bancorporation transferred its so 
acquired assets to its subsidiary, the petitioner. The North- 
west Bancorporation did not agree to buy the shareholders' 
interests in the Stockholders' Account, and there is no testi- 
mony which would support such an assertion. What they 
agreed to buy, and what they agreed to pay into the bank, 
were the assets of Stockholders' Account. True, the records 
of the assets of the old Stockholders' Account were main- 
tained in the same accounting book. The purpose of this can 
be plainly seen, as it was necessary to "ear-mark" these as- 
sets in order that the qualifying shareholders' interests 
might be protected and identified. 

On page twenty-tAvo (22) of his brief, respondent's coun- 
sel asserts : 

"At no time did the petitioner ever make such reports 
(to the Comptroller) or consider it necessary to do so, 
as to this Account, yet, if the assets of Stockholders' 
Account were a part of petitioner's assets, as it is con- 



14 

tended (R. 9), the petitioner had violated the banking 
laws, etc." 

There is no testimony to warrant this statement. 

A non-ledger asset of a bank is an asset owned by a bank 
bnt not listed or recorded in its general ledger. 

Assume X Bank holds Y's unsecured note for |10,000.00. 
Y dies, leaving no assets. The comptroller, being informed, 
directs X to charge it off its general books. X does so. It 
now becomes a non-ledger asset. Assume that R, who is 
president of the bank, owning one per cent of its stock, later 
secretly collects the |10,000.00 from Y's father. Would the 
comptroller, if advised, allow R to put it in his pocket, or 
would he take supervision of said sum? We think he would 
take supervision and force R to put it back into the bank, 
as a ledger asset, to be treated as a recovery. 

Wherefore, appellant prays further that the court direct 
the respondent herein to refund to appellant TP]N THOU- 
SAND TWO HUNDRED SIXTY-TWO and 19/100 (|10,- 
262.19) DOLLARS. 

February 25th, 1935. 

Peter S. Rask, 
P. J. Coffey^ 
lOJiS Northivestern Bank Building, 

Minneapolis, Minnesota, 

T. E. OiLREKT, 

Dillon, Montana, 
Attorneys for Petitioner. 



United States Circuit Court of Appeals 

FOR THE NINTH CIRCUIT. 
No. 7462. 



First National Bank of Dillon,, Montana^ 

O Petitioner, 
vs. 

Commissioner of Internal Re^'enue^ 

Respondent. 



Upon Petition to Review an Order of the United States 
Board of Tax Appeals. 



PETITION FOR REHEARING. 



Peter S. Rask^ 
P. J. Coffey, 
lOJi.3 NortJiwestern Bank Building, 

Minneapolis, Minnesota, 
Attorney for Petitioner. 



!M 4 r>'v.. 



Hayward Brief Co., 601-7 Fourth Ave. So., Minneapolis 

JLI^ 



PA' 



United States Circuit Court of Appeals 

FOR THE NINTH CIRCUIT. 
No. 7462. 



First National Bank of Dillon^ Montana^ 

Petitioner^, 
vs. 

Commissioner of Internal Revenue^ 

Respondent. 



Upon Petition to Review an Order of the United States 
Board of Tax Appeals. 



PETITION FOR REHEARING. 



Now, on this 29th day of May, 1935, again comes the First 
National Bank of Dillon, Montana, Appellant in the above 
entitled cause, and files this its Petition for a rehearing, and 
for grounds thereof alleges the following : 



In the findings contained in the Opinion filed herein on 
May 6th, 1935, that: 

"The bank, after the transaction had possession of the 
assets, books, notes and records of the Stockholders' 
Account, but this was true before the transaction of 
November 12, 1929. J. H. Gilbert testified, 'The assets 



of the Stockholders' Account or funds were carried on 
the books of the bank, being treated as non-ledger assets 
of the bank. All the assets of the Stockholders' Account 
were treated as non-ledger assets of the bank/ " 
this Court misapprehended, misconceived, and considered 
this testimony as apphing to the state of facts existing prior 
to November 12, 1929, while, in fact, this testimony, quoted 
above, had reference to, and the witness was testifying 
concerning the period subsequent to November 12th of 1929 
(R. 51), and there is no testimony or evidence in the Record 
that Stockholders' Account, or its assets, were treated or 
considered by the Bank as assets of the Bank prior to No- 
vember 12th of 1929. 

II. 

In the finding made in said Opinion that : 

"This testimony justified the Decision of the Board 
of Tax Appeals notwithstanding the fact that the liank, 
after the transfer, exercised ownership over a portion 
of the funds in the Stockholders' Account," 
the Court misapprehended and overlooked the evidence on 
that point and on the facts as to the treatment and handling 
of the assets of the said Account i)rior to November 12th, 
1929, and subsequent to November 12th, 1929, for it was 
proved and uncontroverted (R. 00) testimony of J. II. Gil- 
bert : 

"Up to the time the Bancorporntion purchased the 
stock of petitioner, the funds were treated as assets of 
the stockholders. The assets were sold by the stock- 
holders in tlie exchange to the Bancorjmration.'' 

Referring to the sale November 12th, 192!), Mr. (Jilbert 
testitied (R. 00) : 



"When he, the stockholder, transferred his bank stock, 
he transferred any equities that he had in the fund back 
to the Bank." 

Testimony of J. H. Gilbert (R. 45) : 

"As to the handling- of the fund prior to 1929, two 
Trustees had been designated to manage the Assets of 
Stockholders' Account, who were Loaning Officers of the 
Bank." 

As to when the assets of Stockholders' Account were 
placed upon the Bank's books, the testimony in the Record 
discloses that the Court overlooked, or misconceived the fol- 
lowing uncontro verted testimony of R. F. Mactavish (R. 
50-51) : 

"Only the stock of petitioner is shown in the books 
of the Northwest Bancorporation. The assets of Stock- 
holders' Account have been treated by the Northw^est 
Bancorporation, since the time of the acquisition of the 
bank on November 12th, 1929, just the same as the capi- 
tal structure of the bank. The assets of the Stock- 
holders' Account subsequent to the acquisition of peti- 
tioner's stock by Bancorporation were carried on peti- 
tioner's books as non-ledger assets of petitioner." 

It is to be noted that under the terms of the contract of 
acquisition, and the testimony of J. H. Gilbert (R. 53), that 
the Northwest Bancorporation acquired the assets of Stock- 
holders' Account under the terms of this agreement, paying 
a substantial consideration therefor, and that they were, 
subsequent to the acquisition on November 12th, 1929, put 
upon the Bank's books as non-ledger assets. 



III. 

In making the finding in said Opinion that the terms of 
the contract of acquisition do not solve the difficnltv, and 
inferring in its Opinion that a separate taxable nnit con- 
tinued to exist after the acquisition on November 12th, 1929, 
of this Stockholders' Account, it is believed that the Court 
misapprehended the terms of the contract itself, which pro- 
vides (R. 49) : 

"The shareholders agree that all such assets shall be- 
come assets of the Bank." 

Attention is drawn to the fact that the assets of Stock- 
holders' Account were purchased and paid into the Bank, 
and not shares or interests in Stockholders' Account. 

IV. 

In its findings made in said 0])inion the Court has, Ave 
believe, misconceived the issues uiade up l)y the pleadiugs, 
admissions, and stipulations, and failed to make a specific 
finding as to whether or not the proper fractional portion 
of the assets was the property of the Bank, as contended by 
Petitioner. 

It was conclusively proved tliat the assets of Stockholders' 
Account were purchased by the Northwest Bancorporation 
and paid into the Petitioner as a ])art of its cai)ital struc- 
ture, and that the assets thereby became the jtroperty of the 
Bank. This is the only question at issue under the pleadings 
and sti])ulati()n. Government counsel, on page fifty-nine (59) 
of the Record, having agreed : 

"If petitioner owned those assets as of December .'Ust, 
1929, why, of course, it would be entitled to the deduc- 
tion." 



Petitioner therefore prays that a re-hearing of said cause 
be allowed. 

First National Bank of Dillon^ Montana,, 

P. J. Coffey, 
Peter S. Rask, 
lOJtS Northuyestern Bank Building, 

Minneapolis, Minnesota, 
Attorneys for Petitioner. 



I hereby certify, that in my opinion and judgment as coun- 
sel herein, the grounds of the foregoing Petition are well 
founded, and I believe the foregoing Petition for a rehearing 
in said cause to be well founded, and that the same is not 
interposed for delay, and that the said Petition is proper to 
be presented and filed. 

Peter S. Rask, 
104^3 Northwestern Bank Building, 

Minneapolis, Minnesota, 
Attorney for Petitioner. 



No. 7462 



In the United States Circuit Court of 
Appeals for the Ninth Circuit 



First Nation'al Bank of Dillon, Montana, 
petitioner 

V. 

Commissioner of Internal Revenue, respondent 



ON PETITION FOR REVIEW OF DECISION OF THE UNITED 
STATES BOARD OF TAX APPEALS 



RESPONDENT'S REPLY TO PETITION FOR REHEARING 



FRANK J. WIDEMAN, 
Assistant Attorney Oeneral. 

SEWALL KEY, 

J. LOUIS MONARCH, 

LOUIS FOSTER, 

Special Assistants to the Attorney General. 



?!•■"** -ft""^.. 



PAUL 1^ ^'tmiEN, 



In the United States Circuit Court of 
Appeals for the Ninth Circuit 



No. 7462 



FiEST National Bank of Dillon, Montana, 
petitioner 

V. 

Commissioner of Internal Revenue, respondent 



ON PETITION FOR REVIEW OF DECISION OF THE UNITED 
STATES BOARD OF TAX APPEALS 



RESPONDENT'S REPLY TO PETITION FOR REHEARING 



The respondent submits that the petition for re- 
hearing should be denied for the following reasons : 



Petitioner appears to be under the impression 
that this Court makes findings of fact. This court 
is of course under no such duty. The facts were 
found by the Board of Tax Appeals and its Memo- 
randum Opinion contains the following (R. 31) : 

The record shows that after this contract of 
November 12, the bank carried this account 
exactly as it had carried it in the past, i. e., 

1373—35 (1) 



as a nonledger account, the only difference 
being that it claimed it as a bank asset in 
making out its income-tax return for that 
year. 

This Court was satisfied that the finding was sup- 
ported by the testimony which it cited in its opin- 
ion, and we submit that there is no misapprehen- 
sion of the facts. The petition for rehearing quotes 
only a part of the evidence which this Court thought 
justified the Board's finding, the omitted statement 
being as follows: 

The method of keeping the Stockholders' 
Account is as it was. There has been no 
change so far as the records are concerned 
in the method of keeping it. 

While petitioner refused to offer in evidence the 
entire contract upon which it relied (R. 30), there 
are further statements in the record which lend 
support to the conclusion that petitioner was in 
charge of the Stockholders' Fund both before and 
after the sale of its stock to the Northwest Bancor- 
poration. The agreement, relating to the Stock- 
holders' Fund and executed by the stockholders 
three years after the fund was set up, provided 
(R. 43-44) that the fund was— 

to be credited to a Stockholders' Account on 
the books of the Bank, and to be used as di- 
rected by the directors or the officers of the 
Bank for the benefit of shareholders of the 
Bank * * *. 



In carrying out this agreement, the record shows 
(R. 45-46, 53-54) : 

The stockholders had no voice in or con- 
trol of the fund in Stockholders' Account. 
As to the handling of the fund prior to 1929, 
two trustees had been designated to manage 
the assets of Stockholders' Account, who 
were loaning officers of the Bank. The 
handling and management of the fund was 
not discussed with the stockholders gener- 
ally. 

A record, called by the witness a "control 

book", was maintained from the time the 

fund was set up. It contained a complete 

record of all transactions from the time the 

fund was set up. 

***** 

Since November 12, 1929, the records of 
Stockholders' Account have been maintained 
in the same control book as was theretofore 
used. * * * 

These statements support the finding that the man- 
agement of the Stockholders' Account was not 
changed after the sale of the bank stock and that 
the records were kept in the same manner as be- 
fore. This is significant since it is admitted by the 
petitioner that prior to the sale the Account be- 
longed to the stockholders and was a separate tax- 
able entity. 

II 

On page 3 of the petition for rehearing it is con- 
tended that the Northwest Bancorporation ac- 
quired the assets of the Stockholders ' Account un- 



der the terms of the agreement of November 12, 
1929, and that they were subsequently put upon the 
bank's books as nonledger assets. It appears that 
the plan as originally conceived (R. 27, 42, 43) con- 
templated that the bank should create in its books 
a nonledger account in which to keep track of such 
assets. Petitioner's contention that the assets were 
carried as nonledger assets subsequent to Novem- 
ber 12, 1929, is accordingly entirely consistent with 
the finding that the bank's relation to the assets was 
not changed by the agreement of that date. As a 
national bank, the petitioner is under the strict pro- 
visions of the Federal banking laws and must sub- 
mit detailed reports as to its resources and liabil- 
ities to the Comptroller of Currency. But this 
Account has at no time been under such supervi- 
sion, and is not included in the required reports 
because it is in fact entirely distinct from the re- 
ported assets of the petitioner. So we submit that 
there is no basis for the contention that this Court 
misconstrued the testimony or that it was wrong in 
holding, in substance, that the Stockholders' Ac- 
count was continued as a separate taxable entity. 

Ill 

Petitioner contends that the assets o\' the Stock- 
holders' Account were purchased and paid into the 
bank and were not shares or interests in the Stock- 
holders' Account. It is conceded that there was a 
separate entity prior to November 12, 1929. The 
separate entity was the owner of the assets. Hence 



the stockholders did not own the assets, but merely- 
held interests in the Account. They could transfer 
no more than they owned, and since 295 shares were 
not represented in the agreement of November 12, 
1929, it is apparent that the sale of the assets could 
not have been accomplished by the agreement. The 
Board held (R. 31) : 

The terms of that part of the contract be- 
fore us in no way purport to transfer title 
in the assets here in dispute to the petitioner 

•3fr * * 

In view of this situation the statement in the con- 
tract (R. 49) that ''The Shareholders agree that all 
such assets shall become assets of the Bank" re- 
flects a mistaken legal conclusion. 

CONCLUSION 

In view of the foregoing, we submit that there 
is no ground for a rehearing and that the petition 
should be denied. 
Respectfully, 

Frank J. Wideman, 
Assistant Attorney General. 
Sewaul. Key, 
J. Louis Monarch, 
Louise Foster, 
Special Assistants to the Attorney General. 
July 1935. 



II. S. GOVERNMENT PRINTING OFFICE: 1935 



NO. 7469 



Winittti ^tateg 

Circuit Court of Appeals; 



ifor tfje Minif) €ivtuit 



UNITED STATES OF AMEEICA, ^^ 

Appellant, 

vs. 

NORTHERN PACIFIC RAILWAY COMPANY, 

Appellee. 



Cransicript of l^ecorb 



Upon Appeal from the District Court of the 
United States for the District of Montana. 



FILED 

JUL 6- 



PAUL P. O'BRIEN, 



PARKER PRINTINO COMPANY, 545 SANSOME STREET, SAN FRANCISCO 80— «-27-34 



NO. 7469 



mnitth Matti 

Circuit Court of Appeals 



Jfor tfje Mintf) Circuit. 



UNITED STATES OF AMERICA, 

Appellant, 

vs. 

NORTHEEN PACIFIC RAILWAY COMPANY, 

Appellee. 



^xm^tvipt of Eetorb 



Upon Appeal from the District Court of the 
United States for the District of Montana. 



PARKER PRINTING COMPANY, 545 SANSOME STREET, SAN FRANCISCO SO— 8-27-34 



INDEX. 

[Clerk's Note: When deemed likely to be of an Important nature, 
errors or doubtful matters appearing in the original certified record are 
printed literally in italic; and, likewise, cancelled matter appearing in 
the original certified record is printed and cancelled herein accordingly. 
Wben possible, an omission from the text is indicated by printing in 
Italic the two words between which the omission seems to occur.] 

Page 
Answer 7 

Assignment of Errors 55 

Attorneys, Names and Addresses 1 

Bill of Exceptions 13 

Witnesses for Defendant: 
Purcell, Mark 

—direct 23 

— cross 28 

— redirect 30 

— recross 31 

— redirect 36 

— recross 37 

— redirect 38 

Farrell, Robert 

— direct 40 

Lowry, T. F. 

— direct 43 

— cross 47 

Whiteleather, H. L 42 

Abeey, R. C 42 

Decision 48 

Order granting five days to prepare bill of 

exceptions 52 



U INDEX 

Page 

Stipulation to bill of exceptions 53 

Certificate of Judge to bill of exceptions 53 

Citation 65 

Clerk's Certificate to Transcript of Record 67 

Complaint 2 

Decision of Court 48 

Judgment 12 

Order Allowing Appeal 62 

Petition for Appeal 54 

Praecipe for Transcript of Record 66 

Stipulation for Diminution of Record 63 

Stipulation Waiving Jury Trial and Agreed 

Statement of Facts 14 

Summons 5 



NAMES AND ADDRESSES OF ATTORNEYS 
OF RECORD. 

Mr. JAMES H. BALDWIN, 

United States Attorney, and 
Mr. DONALD J. STOCKING, 

Asst. U. S. Attorney, of Butte, Montana, and 
Mr. M. C. LIST, 

Special Assistant to the United States Attorney, 

of Washington, D. C, 

Attorneys for Appellant, 

Messrs. GUNN, RASCH, HALL & GUNN 

of Helena, Montana, and 
Mr. HOWARD TOOLE 

of Missoula, Montana, 

Attorneys for Appellee. [1*] 



In the District Court of the United States in and 
for the District of Montana. 

No. 1621 

THE UNITED STATES OF AMERICA, 

Plaintiff, 

vs. 

NORTHERN PACIFIC RAILWAY COMPANY, 

Defendant. 

BE IT REMEMBERED that on February 1, 
1934, Complaint was duly filed herein, in the words 
and figures following, to-wit : [2] 



*Page numbering appearing at the foot of page of original certified 
Transcript of Eecord. 



2 United States of America vs. 

In the District Court of the United States for the 
District of Montana. 

No. 1621 

THE UNITED STATES OF AMERICA, 

Plaintiff, 

V, 

NORTHERN PACIFIC RAILWAY COMPANY, 

Defendant. 

Now comes the United States of America, by 
James H. Baldwin, United States Attorney for the 
District of Montana and brings this action on behalf 
of the United States against the Northern Pacific 
Railway Company, a corporation organized and do- 
ing business under the laws of the State of Wiscon- 
sin, and having an office and place of business at 
Paradise, in the State of Montana ; this action being 
brought upon suggestion of th(^ Attorney General 
of the United States at the request of the Interstate 
Commerce Commission, and upon information fur- 
nished by said Connnission. [3] 

FOR A CAUSE OF ACTION 

plaintiff alleges that defendant is, and was during 
all the times mentioned herein, a common carrier en- 
gaged in interstate commerce by railroad in the 
State of Montana. 

Plaintiff further alleges that in violation of the 
Act of Congress, known as the Safety Appliance 
Act, approved March 2, 1893 (27 Statutes at Large, 
531), as amended by an Act approved April ], 1896 



Northern Pacific Railway Co. 3 

(29 Statutes at Large, 85), as amended by an Act ap- 
proved March 2, 1903 (32 Statutes at Large, 943), 
contained in U. S. Code, title 45, sections 1 to 10 
inclusive, and as modified by an order of the Inter- 
state Commerce Commission of June 6, 1910, made 
pursuant to the provisions and requirements of the 
aforesaid amendment of March 2, 1903, defendant, 
on August 4, 1933, operated on its line of railroad, 
over a part of a highway of interstate commerce, 
one train, to wit: Its own extra, consisting of sev- 
enty-four cars, drawn by its own locomotive engine 
No. 1848, all of said cars being equipped with power 
or train brakes, not less than 85 per cent thereof, 
to wit : seventy-three cars, having their brakes used 
and operated by the engineer of said locomotive. 

Plaintiff further alleges that on said date defend- 
ant operated said train as aforesaid over its line of 
railroad from Paradise, in the State of Montana, 
within the jurisdiction of this court, when one of 
the power-braked cars associated together with said 
85 per cent, to wit: N. P. refrigerator No. 93305, 
the eighth car, did not have its power or train 
brakes used and operated by the engineer of said 
locomotive, the cut-out cock in the cross-over pipe 
being closed, and when all of said power-braked 
cars which were associated with said 85 per cent 
did not have their brakes so used and operated. 

Plaintiff further alleges that by reason of the 
violation of the said Act of Congress defendant is 
liable to the plaintiff in the sum of one hundred 
dollars. [4] 



4 United States of America vs. 

WHEREFORE, plaintiff prays judgment against 
said defendant in the sum of One Hundred dollars 
and its costs herein expended. 

JAMES H. BALDWIN 

United States Attorney. 
By Arthur P. Acher, 

Assistant U. S. Attorney. 

United States of America, 
District of Montana. — ss. 

Arthur P. Acher, being first duly sworn, on oath, 
deposes and says : that he is a duly appointed, quali- 
fied, and acting Assistant United States Attorney 
for the District of Montana, and as such makes this 
verification to the foregoing information ; that he has 
read the said information and knows the contents 
thereof, and that the same is true to the best of his 
knowledge, information and belief. 

ARTHUR P. ACHER. 

Subscribed and sworn to before me this 1st day of 
February, 1934. 

[Seal] H. H. WALKER, 

Deputy Clerk U. S. District 
Court, District of Montana. 

[Endorsed] : Filed Feb. 1, 1934. [5] 



Northern Pacific Railway Co. 5 

Thereafter, on Feb. 1, 1934, Summons was duly- 
issued herein, in the words and figures following, 
to wit: [6] 

[Title of Court and Cause.] 

SUMMONS. 

Action brought in the said District Court, and the 
Complaint filed in the office of the Clerk of said Dis- 
trict Court, in the City of Helena, County of Lewis 
& Clark. Assigned to Missoula Division. 

The President of the United States of America, 
Greeting : 

To the Above-named Defendant: 

Northern Pacific Railway Company 

You are Hereby Summoned to answer the com- 
plaint in this action which is filed in the office of the 
Clerk of this Court, a copy of which is herewith 
served upon you, and to file your answer and serve 
a copy thereof upon the Plaintiff's attorney within 
twenty days after the service of this summons, ex- 
clusive of the day of service ; and in case your fail- 
ure to appear or answer, judgment will be taken 
against you by default, for the relief demanded in 
the complaint. 

Witness, the Honorable Geo. M. Bourquin, Judge 
of the United States District Court, District of 
Montana, this 1st day of February in the year of 
our Lord one thousand nine hundred and thirty- 



6 United States of America vs. 

four and of our Independence the one hundred and 
fifty-eighth. 

[Seal of Court] C. R. GARLOW 

Clerk. 
By H. H. Walker 

Deputy Clerk. 

United States Marshal's Office 
District of Montana 
I Hereby Certify, that I received the within sum- 
mons on the 1st day of February, 1934, and person- 
ally served the same on the 1st day of February, 
1934, on Northern Pacific Railway Company by 
delivery to, and leaving with M. S. Gunn, Statutory 
Agent of said defendant named therein personally, 
at Helena, County of Lewis & Clark in said District, 
a copy thereof, together with a copy of the com- 
plaint attached thereto. 

Dated this 1st day of February, 1934. 
ROLLA DUNCAN 

U. S. Marshal. 
By W. C. Packer 

Deputy. 
[Endorsed] : Filed Feb. 2, 1934. [7] 



Northern Pacific Railway Co. 7 

Thereafter, on Feb. 26, 1934, Answer was duly 
filed herein, in the words and figures folloAving to 
wit: [8] 

[Title of Court and Cause.] 

ANSWER. 

Comes now the defendant, Northern Pacific Rail- 
way Company, and for Its answer to the complaint 
on file in the above-entitled cause : 

I. 

Admits that it is a corporation, organized and 
doing business under the laws of the State of Wis- 
consin, and is, and, during all the times mentioned in 
said complaint, it was a common carrier engaged 
in interstate commerce by railroad in the State of 
Montana. 

II. 

Admits that on August 4, 1933, defendant oper- 
ated, on its line of railroad over a part of a highway 
of interstate commerce one of its trains designated 
as Extra East, consisting of 74 cars, drawn by its 
locomotive engine No. 1848; admits that all of said 
cars were equipped with power [9] or train brakes, 
and that not less than 85% thereof, to-wit, 73 of 
said cars then had brakes used and operated by the 
engineer of said locomotive. 

Admits that the defendant, on said date, operated 
said train from Paradise, in the State of Montana, 
when one of the 74 power braked cars associated 
together in said train, to-wit: N. P. Car No. 93305, 



8 United States of America vs. 

being the eighth car in said train, did not liave its 
power or train brakes used and operated by the 
engineer of said locomotive and admits that the cnt- 
out cock in the cross-over pipe in said car was closed. 

in. 

Denies each and every allegation of said complaint 
not hereinbefore specifically admitted or denied. 

FOR A FURTHER ANSAVER AND AFFIRM- 
ATIVE DEFENSE TO SAID COMPLAINT, DE- 
FENDANT ALLEGES: 

I. 

That it is a common carrier engaged in interstate 
commerce by railroad and operates a line of rail- 
road in interstate commerce from Spokane, in the 
State of Washington, to Lanrel, in the State of 
Montana; that in the State of Montana its line of 
railroad extends east through the cities or towns of 
Paradise, Missoula and Laurel. 

That at the city of Spokane, Washington, the de- 
fendant maintains switch engines, a repair station 
or point, and a crew of repair men to repair defects 
discovered in the braking or other equipment of cars 
and engines. 

That east of Spokane, the next town or place 
where defendant maintains switch engines and a re- 
pair station or [10] point and a crew of repair men 
to repair defects in brakes or other equipment on its 
cars or engines is the city of Missoula, Montana. 
That no switch engines were kept and no repair 



Northern Pacific Railway Co. 9 

station was niaintaiiied and no repair men employed 
at Paradise on Augnst 4, 1933, to repair brakes or 
other equipment on cars and engines. 

II. 

That when said Extra East, hauled by locomo- 
tive 1848, departed from Spokane on the night of 
August 3, 1933, said car No. N. P. 93305 was equip- 
ped with power or train brakes, which were then 
used and operated by the engineer of said locomo- 
tive. That after said train departed from Spokane 
and before reaching the town of Paradise, the brakes 
on said car ceased to operate properly and did so 
interfere with the movement of said train that it 
became necessary for the crew in charge of said train 
to close the cut-out cock on said car so as to release 
the brakes thereof from operation as power brakes 
by the locomotive engineer. 

III. 

That the closing of the cut-out cock on said car, 
as aforesaid, did not interfere with the free passage 
of air thru the main train pipe on said train, or in- 
terfere with the control by the locomotive engineer 
of the power or train brakes on any of the other 
cars in said train that were ahead or behind of said 
car, and all of the 74 cars in said train, other than 
the said car, were still associated and connected with 
the power or train brakes operated by the engineer 
of said locomotive. [11] 



10 United States of America vs. 

IV. 

That the rules and regulations of the defendant, 
promulgated by it on March 31, 1925, and which 
have been in force ever since, provide as follows, 
to-wit : 

"To comply with a decision rendered by the 
United States Supreme Court as interpreted by 
our Legal Department, please see that all con- 
cerned understand that freight cars with brakes 
cut out (cut out cock in the brake pipe connec- 
tion closed) must not be handled in trains past 
available repair points unless they are placed in 
the train to the rear of all cars having their 
brakes operated by the engineer. ' ' 

That most railroads in the northwest have had in 
force for about the same length of time, a rule the 
same as the above rule of this defendant. 

That defendant is informed and believes and 
alleges, upon information and belief, that the mem- 
bers, officers and agents of the Bureau of Safety of 
the Interstate Commerce Commission have had 
knowledge of the existence of the above rule of the 
defendant ever since its promulgation and have had 
knowledge that trains, and the cars therein have 
been, during all such time, handled and operated in 
accordance with said rule. 

V. 

That, as hereinbefore alleged, the station of Para- 
dise was not on August 4, 1933, a repair point and 
not supplied with switch engines, and that the first 



Northern Pacific Railtvay Co. 11 

available repair point on the line of the defendant 
at which said car could have been switched out and 
the defective brakes repaired, was at said repair 
point at Missoula, Montana. [12] 

VI. 
That the hauling of said car east of Paradise to 
the first available repair point at Missoula, pur- 
suant to and as authorized by said rule of the defend- 
ant, adopted on March 11, 1925, as aforesaid, was 
not, as alleged in plaintiff's complaint, a violation 
of the Act of Congress, known as the Safety Ap- 
pliance Act or of the order of the Interstate Com- 
merce Commission based thereon. 

WHEREFORE, having fully answered said com- 
plaint, defendant prays to be dismissed hence with 
its just costs. 

HOWARD TOOLE, 
GUNN, RASCII & HALL, 
Attorneys for Defendant. 

State of Montana, 

County of Lewis and Clark — ss. 

Milton C. Gunn, being first duly sworn, says : That 
he is an officer of the defendant, in the above-entitled 
cause, to-wit, one of its Division Counsel for the 
State of Montana; that he makes this verification 
as such officer for and on behalf of said defendant ; 
that he has read the foregoing answer and knows 
the contents thereof, and that the matters and things 
therein stated are true to the best of his knowledge, 
information and belief. 

MILTON C. GUNN. 



12 United States of America vs. 

Subscribed and sworn to before me this 26th day 
of February, 1934. 
[Notarial Seal] A. A. MAJOR, 

Notary Public for the State of Montana, 
residing at Helena, Montana. 

My Commission expires Feb. 28th, 1934. 

Due personal service of within answer made and 
admitted and receipt of copy acknowledged this 26th 
day of February, 1934. 

D. L. EGNEW, 
Asst. U. S. Atty. 
Attorney for Plaintiff. 

[Endorsed] : Filed Feb. 26, 1934. [13] 



Thereafter, on March 23, 1934, Judgment was duly 
entered herein, in the words and figures following, 
to-wit : [14] 

In the District Court of the United States for the 
District of Montana — Missoula Division 

No. 1621. 

THE UNITED STATES OF AMERICA, 

Plaintiff, 
vs. 

NORTHERN PACIFIC RAILWAY COMPANY, 

Defendant. 

JUDGMENT. 

This cause having come on regularly for trial, 
before the Court without a jury, on the 5th day of 



Northern Pacific BaUway Co. 13 

March, 1934, stipulation waiving right to trial by 
jury having theretofore been filed, and said cause 
having been submitted upon oral testimony taken at 
the trial, and upon a stipulation as to certain facts 
filed herein, and the Court, being fully advised in 
the premises, having found in favor of the defendant 
and against the plaintiff : 

IT IS ORDERED, ADJUDGED AND DE- 
CREED that said cause be dismissed. 
Judgment entered this 23rd day of March, 1934. 

C. R. GARLOW, 
Clerk of U. S. District Court, District 
of Montana. 

By G. Dean Kranich, 

Deputy. [15] 



Thereafter, on April 6, 1934, Bill of ExceiDtions, 
as allowed, settled and approved, was duly filed 
herein, in the words and figures following, to- 
wit: [16] 

[Title of Court and Cause.] 

PLAINTIFF'S PROPOSED BILL OF 
EXCEPTIONS. 

This cause came on regularly for hearing on 
March 5th, 1934 before the Honorable George M. 
Bourquin, District Judge, sitting without a jury, the 
plaintiff being represented by Arthur P. Acher, 
Esq., Assistant United States Attorney and M. C. 
List, Esq., Special Assistant to the United States 



14 United States of America r.s. 

Attorney, and the defendant being represented by 
Milton C. Gnnn, Esq., of the firni of Guini, Rasch 
& Hall. 

Thereupon an agreed statement of certain facts 
was filed herein as follows: 

Now come the plaintiff and defendant, in the 
above numbered and styled cause, by their re- 
spective attorneys, and in order to facilitate the 
trial thereof, hereby stipulate and agree : 

That this cause may be heard and determined 
by the Court, a jury being hereby specially 
waived. 

That the following facts, which are agreed to 
be true in all particulars, may be, except as to 
the objections noted, considered as facts in the 
case at any trial thereof to have the same weight 
and effect as if oral testimony or documentary 
evidence had been introduced to prove the same : 

I. 

Defendant is a corporation, organized and 
doing business under the laws of the State of 
Wisconsin, with an office and place of business 
at Paradise, Montana. It is, and was during 
all the times mentioned in plaintiff's complaint, 
a common carrier engaged in interstate com- 
merce by railroad in the State of Montana, its 
main line running from Seattle, Washington, 
through Spokane, Washington, Paradise, Mis- 
soula, Helena and Laurel, Montana, to St. Paul, 
Minnesota. 



Northern Pacific Railway Co. 15 

II. 

At all times mentioned in the complaint 
herein, the defendant maintained a repair sta- 
tion for cars at Yardley Yard in Spokane, 
Washington, and at Missoula, Montana. [17] 

Between Yardley Yard in Spokane and Mis- 
soula, the defendant had no repair station 
and/or workmen for repairing cars at any sta- 
tion or point. 

III. 

At Paradise, a train yard was maintained, 
consisting of eight or ten tracks, with sufficient 
switches or cross-overs for all switching which 
might become necessary in the operation of 
defendant's railroad. Paradise was and is a 
terminal for local freight trains and their crews, 
both from and to the east and west, said local 
trains being made up and broken up there. 
Locomotives hauling such local trains did not 
and do not run through Paradise. That the mak- 
ing up and breaking up of the local freight 
trains referred to is not done by a switch engine, 
but is done by the road engine hauling the local 
freight train referred to. 

On all trains, both freight and passenger, 
operating between Spokane and Missoula, train 
and engine crews were changed at Paradise, and 
on freight trains the cabooses were also changed. 

IV. 

Subject to defendant's objections that the fol- 
lowing is irrelevant and immaterial, it is agreed 



16 United States of America vs. 

that until November 18, 1927, defendant had, for 
many years, maintained a regular repair point 
at Paradise, which was at said time abandoned 
and that since said time the nearest point east 
thereof where repairs are made is Missoula. 

V. 

On August 3, 1933, defendant caused to be 
made up in Yardley Yard at Spokane a certain 
freight train, consisting of locomotive No. 1848, 
tender thereto, 73 refrigerator, box and tank 
cars, and its caboose 1650, all of which were 
equipped with power or train brakes. That the 
eighth car behind the tender was N. P. re- 
frigerator 93305, containing merchandise con- 
signed from Spokane to Livingston, Montana. 

That at 10:55 P. M., Pacific Time, August 3, 
1933, said train, known and designated as Extra 
East 1848, left Yardley Yard at Spokane for 
Laurel, Montana, having the brakes on said loco- 
motive, tender, 73 cars and caboose all con- 
nected, operated by and imder the control of the 
engineer on locomotive 1848. 

VI. 

At some point between Yardley Yard and 
Paradise, the power or train brakes on N. P. 
refrigerator car 93305 failed to work properly 
and because of the possibility of said brakes 
sticking and causing delay or damage to the 
train, one of the train crew cut out such brakes 
by turning the cut-out cock in the cross-over 



Northern Pacific Railwa/y Co. 17 

pipe on said car, and that with the brakes on car 
93305 in such condition, extra east 1848 pro- 
ceeded on its journey, arriving at Paradise at 
8:20 A. M., Pacific Time, August 4, 1933. 

By turning the cut-out cock in the cross-over 
pipe on said car, it was impossible for the engi- 
neer to operate the brakes on that car, but that 
this fact did not interfere with the proper opera- 
tion and control by the engineer of any of the 
other power braked cars in the train. 

VII. 

The defendant provides its train crews with 
cards to be placed on cars upon which the 
brakes are not working properly, which said 
card is commonly known as a "cut-out" card. 
That no such card was put on N. P. car 93305 
between Spokane and Paradise or at Paradise. 

VIII. 

Upon arrival of said train at Paradise, a new 
engine and train crew took charge of it, and 
locomotive 1848 was then coaled and watered, 
which took 10 minutes. It was then used to 
switch out caboose 1650 and switch in caboose 
1181, which consumed 20 minutes, following 
which work said locomotive was again coupled 
onto the head end of the train. [18] Thereafter 
and before leaving Paradise the new engine and 
train crew consumed 5 minutes in making a test 
of the power or train brakes on said train pur- 
suant to Rule No. 1002 of the Transportation 
Rules of the defendant, which reads as follows : 



18 United States of America vs. 

'Conductors and enginemen will give air 
brakes personal attention and will exact simi- 
lar care from brakemen. They will not start 
a train from any point after switching has 
been done, cars set out or picked up, helper 
coupled to rear of train, engines changed, or 
where for any reason train pipe has been dis- 
connected or an angle cock closed, until after 
the proper test of air brakes has been made by 
trainmen and enginemen who is to control 
brakes. ' 
That no other cars were set out of said train or 
picked up at Paradise, and locomotive 1848 did 
no other switching there. 

IX. 

The defendant did not maintain nor operate 
any switch engine at Paradise. 

X. 

The tracks, switches and cross-overs at Para- 
dise were such that N. P. car 93305 could have 
been switched to or near the rear end of the 
train and disassociated from 85% of the cars of 
said train having their brakes operated by and 
under the control of the engineer. 

XI. 

The fact that the brakes on N. P. car 93305 
had been cut out was not discovered by any of 
the new train crew until said train was moving 
out of Paradise, at which time said condition 
was noted by the conductor of the train. 



Northern Pacific Rail way Co. 19 

XII. 

Even if any member of the new crew had 
noted brakes cut out on N. P. car 93305 before 
the train started from Paradise, and even if he 
had reported such fact to the conductor as re- 
quired by the rules of defendant, said car would 
not have been switched to the rear of at least 
85% of the cars that had their powder or train 
brakes operated by and under the control of the 
engineer, for the reason that under defendant's 
practice and instructions, with reference to 
trains of this kind, crews were not permitted to 
switch cars, upon which the brakes become de- 
fective during the movement or journey of a 
train, to the rear of said train or behind 85% 
of the cars thereof having operative brakes ex- 
cept at regular repair points. 

XIII. 

Said train left Paradise at 10 :00 A. M. Moun- 
tain Time, August 4, 1933, and proceeded to 
Missoula, arriving there at 3 :10 P. M. 

After leaving Paradise, the next stop of the 
train was at Superior, Montana, where the con- 
ductor, who had noticed the condition of car 
93305, as it moved out of Paradise, placed a 
"cut-out" card on said car. 

Northern Pacific car 93305 remained in said 
train as the eighth car behind the tender, and 
with its brakes cut out, until it reached Mis- 
soula, where it was cut out of said train and the 



20 United States of America vs. 

brakes were cleaned and a new triple valve in- 
stalled in the braking mechanism thereof. 

From the point west of Paradise where the 
brakes on N. P. car 93305 failed to work and 
were cut out, and until it reached Missoula, said 
train was operated while the eighth car behind 
the tender (N. P. Refrigerator 93305) did not 
have its brakes operated and controlled by the 
engineer. 

XIV. 

The practices herein set forth are still in ef- 
fect at the present time. [19] 

XV. 
IT IS FURTHER STIPULATED AND 
AGREED That either party hereto may intro- 
duce such other or further testimony not incon- 
sistent herewith or contradictory hereof, sub- 
ject to the right of the other party to object to 
the introduction of such testimony on the ground 
of irrelevancy, immateriality or incompetency. 
James H. Baldwin, 

United States Attorney. 
Arthur P. Acher, 

Assistant U. S. Attorney. 
M. C. List, 

Special Assistant to the 
United States Attorney. 
Attorneys for Plaintiff. 



Gimn, Rasch, & Hall, 

Attorneys for Defendant. 



Northern Pacific RaiUvay Co. 21 

Thereupon the following proceedings were had : 

Mr. ACHER : In this first case set for trial, we 
have submitted an agreed statement of facts upon 
which the Government wishes to rest, with one ex- 
ception. We wish to offer in evidence this map, 
which is a part of the records of the Northern Pa- 
cific Railway Company, showing the yards at 
Paradise, Montana. With the Court's permission I 
might tell briefly what the case is about. 

The COURT : Do I understand that the facts are 
all agreed? 

Mr. GUNN: Yes, Your Honor. The agreement, 
the statement of facts is attached to the stipulation 
waiving the jury. The last paragraph of the stipu- 
lation reads, 

"It is further stipulated and agreed that 
either party hereto may introduce such other 
or further testimony not inconsistent herewith 
or contradictory hereof, subject to the right of 
the other party to object to the introduction of 
such testimony on the ground of irrelevancy, 
immateriality or incompetency. ' ' 

In behalf of the defendant we intend to offer what 
we believe will be very brief proof as to the safety 
of operating cars within the center of a train as com- 
pared to operating them at the rear of a train ; and 
also testimony as to the delay, and the results thereof 
to the railroad if they are required to switch such a 
car to the rear of a train at places other than repair 
stations. 



22 United States of America vs. 

Of course, the only question involved here is the 
question reserved by Justice Butler in U. S. v. New 
York Central, in which he says: [20] 

"The question whether it was a violation of 

law to haul defective cars to Erie, the place of 

. the first repair station, while associated with 

the train in prescribed medium, is not involved 

in this case, and we express no opinion upon it. ' ' 

That is the question that is being presented in this 
case. We feel that for the enlightenment of the 
Court, and in explanation of the exact situation to be 
used in the construction of the statute as regards 
that question, this offered testimony should go in. 

The COURT: Very well, if there is no incon- 
sistency. If it is merely cumulative, of course it is 
objectionable. 

Mr. ACHER : Mr. Gunn did not explain the na- 
ture of this case. The law says that on 85 per cent 
of the cars the air brakes must be operated by the 
engineer, and that 85 per cent nuist be associated 
together. The Supreme Court says that each air 
brake in the car must ])e attached to the next one, 
and that they must make a solid block next to the 
engine. Here were seventy-four cars, and the eighth 
car from the engine had the air brake not working. 
This condition came into being somewhere between 
Spokane and Paradise. Our contention is that at 
Paradise they should have switched the car out and 
put it to the rear of the train. The railroad contends 



NortJiey^n Pacific Railway Co. 23 

they could haul it to the first repair point, which is 
Missoula. 

The COURT: Very well, proceed. 

Mr. GUNN: Call Mr. Purcell. 



MARK PURCELL, 

called as a witness in behalf of the defendant, being 
first duly sworn, testified as follows : 

Direct Examination 

By Mr. Gunn : 

My name is Mark Purcell. I am general air brake 
inspector for the Northern Pacific Railway Com- 
pany. I have been engaged in air brake work about 
thirty years. Since 1903, I have made a specialty 
of air brake work. In my study and work that I 
have done in connection with my special work in, 
and special study of, air brake mechanism and 
operations on railroads in the United States since 
1903, I have been more or less directly connected 
with the American Railway Association for two or 
three years ; but for the past — well, for the past four- 
teen years I have been quite closely connected with 
that association, being [21] a member of the brake 
equipment committee, which has to do with air 
brakes, that is, the brake and brake-equipment com- 
mittee of the railway association of America. It has 
a membership of about ten which varies one or two 
from time to time. The duties of that committee are 
to study air-brake equipment, and the most efficient 



24 United States of America vs. 

(Testimony of Mark Purcell.) 

and safe practices and equipment generally. In the 
course of my work I have had occasion to cooperate 
and confer with officials and experts of the Westing- 
house people and other air brake concerns in the 
United States. In other words, since 1903 I have 
made that my life work. 

Q. Mr. Purcell, I will ask you whether it is safer 
to operate a car with the brakes thereon inoperative, 
but having its air line in operation, in the center of 
a train and among and/or associated with other cars 
having their brakes operated by the engineer, than 
it is at the rear of the train and behind all cars hav- 
ing their brakes operated by the engineer. 

Mr. ACHER : One moment, please. To which we 
object, upon the ground that it is incompetent, ir- 
relevant and immaterial. The courts have repeatedly 
held that expert testimony is not admissible in this 
kind of case. Congress has declared that certain 
things are either a violation or not a violation. The 
most recent case is in the circuit court of appeals for 
this circuit, in which they reversed the case on the 
single ground that the lower court had let in testi- 
mony as to whether or not a coupled-up air hose 
between the cars was extremely dangerous. 

The COURT: A jury case? 

Mr. ACHER: Yes. 

The COURT : I will allow it to go in. * * * 
We will hear it over the objection. If it is not com- 
petent, the court will disregard it. 

Mr. ACHER : Note an exception. 



Northern Pacific Railway Co. 25 

(Testimony of Mark Piircell.) 

The COURT : The record will show that the ques- 
tion is objected to, and that an exception is allowed. 
Proceed. 

Mr. GUNN : If the Court please, it occurs to me, 
not that I shall make an argument on this objection, 
but in order that there may be no question in the 
court's mind as to the position the defendant takes 
here, that I should state what our position [22] 
is. It is this : We are not questioning any violation 
of the Act relative to a construction of the term 
"operated," or of the requirement of a railroad 
to move a car to the rear of a train at the first repair 
station. Our contention is that a reasonable con- 
struction of the statute would only require or could 
only require the moving of that car to the rear of 
the train at a repair station, and not at a place prior 
to the time of reaching the repair station. 

The COURT : Very well. Proceed. 

(The question was read to the witness) 

Mr. GUNN: Mr. Purcell, you may answer that 
Yes or No. 

A. It is safer. 

Q. I will ask you whether it is dangerous to per- 
sons and property to operate such a car at the rear 
of all the cars in the train having their brakes 
operated by the engineer. 

Mr. ACHER: We make the same objection, 
Your Honor. 

The COURT : The same ruling. The objection is 
overruled. 



26 United States of America vs. 

(Testimony of Mark Purcell.) 

Mr. ACHER : Note an exception. 

Mr. GUNN : You may, Mr. Purcell, answer that 
question Yes or No. 

A. Yes, sir. 

Q. I will ask you whether allowing such a car 
to remain among and/or associated with power- 
braked cars having their brakes operated by the 
engineer, reduced the braking efficiency of the train. 

Mr. ACHER: We make the same objection. 

The COURT: What is the question? the pur- 
pose? 

Mr. GUNN : I asked him whether allowing such 
a car to remain among and/or associated with 
power-braked cars having their brakes operated by 
the engineer reduced the braking efficiency of the 
train. 

The COURT: The objection is overruled. 

Mr. ACHER : An exception, please. 

Mr. GUNN: You may answer the question, Mr. 
Purcell. [23] 

A. It does not reduce the braking efficiency. 

Q. Will you explain your answer as briefly as 
possible, and in language that a layman, a judge, 
and attorneys can understand, if you please? 

A. The cars — 

Mr. ACHER : We object to the question, if Your 
Honor please. 

The COURT : The objection is overruled. 

Mr. ACHER : An exception, please. 



Northern Pacific Railwa/y Co. 27 

(Testimony of Mark Purcell.) 

A. Having cars in a train with brakes cut out 
tends to cause slack to run and to interchange in 
the train — slack that is damaging to the drawbars 
and that is also liable to injure persons. If the cars 
so cut out, or so rendered inoperative as regards 
brakes, are distributed throughout the train, the run- 
ning of slack is reduced, while the placing of those 
cars — one or more than one car — together at the rear 
of the train tends to increase the severity and the 
liability of slack interchanging at that point. 

Q. Mr. Purcell, does the cutting out of the 
brakes on the particular car interfere with the flow 
of air through the air line of that car to other cars ? 

A. No. 

Q. Will you explain why allowing such a car to 
remain among and/or associated with other cars 
having their power brakes operated by the engineer 
does not reduce the braking efficiency of the train? 

Mr. ACHER : We make the same objection. 

The COURT: The objection is overruled. 

Mr. ACHER : An exception, please. 

Each brake has its effect in retarding the move- 
ment of the train. Where one is cut out and ren- 
dered inoperative, there is that much less braking 
power. If that car is placed at the rear of the train, 
the lack of braking power is the same in effect as 
if the car were somewhere else in the train — just 
as much less power brake as if the car had its brakes 
operative. 



28 United States of America vs. 

(Testimony of Mark Purcell.) 

Q. As I understand it, of course, braking power 
has a direct [24] relation to the weight of any car 
in the train. 

A. Yes. 

Q. So that if that car is in the center of the 
train or at the rear of the train without its brakes 
operating, there is a loss of braking power to the 
extent of the weight of that car, and only that loss, 
wherever it may be ? 

Mr. ACHER: We make the same objection. 

The COURT: The objection is overruled. 

Mr. ACHER : An exception, please. 

Q. (concluded) Is that correct? 

A. Yes, sir. 

Q. Mr. Purcell, is there anything that you desire 
to explain that I have not inquired about ? 

A. Nothing except the delay caused by switching 
these cars out. 

Mr. GUNN : We will cover that by another wit- 
ness. You may inquire, Mr. Acher. 

Cross Examination. 
By Mr. Acher: 

Q. Mr. Purcell, is it not a fact that your rules 
prohibit the hauling of a cut-out car as the first car 
behind the engine? 

A. Yes. 

Q. So that your answer would have to be quali- 
fied to the extent you would not permit the cut-out 
car to be the first car behind the engine? 

A. Yes, sir. 



Northern Pacific Railtvay Co. 29 

(Testimony of Mark Purcell.) 

The COURT: What was that? 

Mr. ACHER: The rules prohibit the hauling of 
a cut-out car as the tirst one behind the engine. 

Q. And that is due to the fact, is it not, Mr. Pur- 
cell, that if the brakes are not operating on the first 
car behind the engine, it is difficult to get what they 
call an emergency application on the train ? 

A. Sometimes it is difficult. 

Q. By "emergency application", you mean a sud- 
den application and not a gradual application? 

A. Yes, sir. 

Q. Such as when you have to stop for some emer- 
gency condition? [25] 

A. Yes, sir. 

Q. If the first car behind the engine did not have 
brakes operating, it would tend to interfere with the 
efficiency of the emergency application ? 

A. Yes, sir, it would. But the question called for 
whether or not the brakes rendered the operation 
inefficient if it was in the middle of the train. 

Q. Oh, you are only talking about the middle of 
the train? 

A. And among other cars of the train. 



Q 

A 

Q 

A 

Q 

A 



And how about the eighth car in the train? 

My answer was based on that condition. 

On the eighth car? 

Yes. 

But not the first? 

No, not the first. 



Mr. ACHER: I see. 



30 United States of America vs. 

(Testimony of Mark Purcell.) 
The COURT : Whereabouts was the car? 
Mr. ACHER : It was the eighth car in the train. 
You may examine, Mr. Gunn. 

Redirect Examination 
By Mr. Gunn: 

Q. Mr. Purcell, explain to the court very briefly 
the difference between the effect of having the brakes 
cut out on a car next to the engine and having such 
a car intermingled with other cars. 

A. The operation of the brakes depends upon the 
reduction of the connection pipe, or in the connect- 
ing pipe, called the brake pipe, throughout the train. 
Where that pipe is very long, the effect that will 
cause the triple valve to operate is not as strong as 
it is where the distance is shorter between the point 
of brake pipe pressure reduction and the triple 
valve. As the distance is longer, the operation is 
less liable to be efficient and reliable. 

Q. On either side the triple valve is still in opera- 
tion, is it not? 

A. The triple valve is in operation on the cars 
on either side of it. 

Q. As a matter of fact, in recent years there has 
been a valve invented or perfected, as I understand 
it, that you call a vent valve, [26] which is now used 
on tenders to reduce the effect of the car with in- 
operative brakes next to the tender. 

A. Yes, sir. But before I reach the point of that 
vent valve, I would necessarily have to explain my 
answer, in order to have the reason understood. 



North 67^71 Pacific Baihvay Co. 31 

(Testimony of Mark Purcell.) 

Q. Will you go ahead, Mr. Purcell, and explain 
that? 

A. The first car behind the engine has an in- 
operative brake on it. The explanation is that the 
distance between the braking valve on the locomotive 
and the brake pipe on the car being quite long, the 
reduction is liable to be less rapid than if it were 
shorter. It is like the length of the brake pipe on a 
car. Consequently it is necessary to have a brake 
next to the engine to insure the operation of the 
brakes in emergencies, because the triple valve on 
each car makes a reduction, when it operates, so as 
to actuate or cause the triple valve on the next car 
to operate. Consequently it is required to have the 
brake in operation on the first car behind the engine. 
Now your further question relative to the vent valve. 
This vent valve is called a brake-pipe vent valve. It 
is placed in the brake pipe under the tender so as to 
divide up the length of the pipe between the brake 
valve on the engine operated by the engineer and the 
first triple valve in the train, and so as to make sure 
that the reduction in brake pipe pressure will be 
sufficient and prompt. This brake-pipe vent valve 
works only in an emergency application. 

Mr. GUNN : That is all. You may examine. 

Recross-Examination 
By Mr. Acher: 

Q. The through air line that goes from the engine 
down through the train is called the train line, is it 
not ? Or what do you call it % 



32 United States of America vs. 

A. Why, it is called the train line, but of late 
years they have used the term ''brake pipe" instead 
of train line. 

Q. Is it not a fact that the brake pipe is more 
efficient if all the cars are cut in and giving air to 
the brakes'? 

A. Approximately. Some. 

Q. In an emergency? 

A. It has been shown and is generally under- 
stood that if there is not more than two triple valves 
— two brakes — together in a train cut [27] out, that 
the emergency is sure to take place or to pass 
through the train. 

The COURT : Well, now, let us see. 
By The Court: 

Q. Your brake pipe, of course, contains the air 
pressure. 

A. That is, when the brake is operating. 

Q. What is the triple valve for ? Is it something 
to reduce the pressure? 

A. It is a valve that causes three operations : The 
charging, the application, and the release of the 
brake on the vehicle to which the triple valve is 
applied. 

Q. By reducing the pressure, the brakes are ap- 
plied? 

A. Reducing the brake pipe pressure applies the 
brakes after the brake is charged up, and raising 
the pressure in the brake pipe releases. 

Mr. GUNN : If Your Honor please, I should like 
to have him explain — 



North c rn Pacific Railway Co. XI 

(Testimony of Mark Piircell.) 
By The Court: 

Q. Well, your air brakes on the car in the train 
is simply in the brake pipe, and the pressure on the — 

A. After- the air is cut in from the locomotive, 
or the charging plant, so that the brakes are ren- 
dered operative, there is air in the brake pipe ; and 
it has to pass slowly through the triple valve and 
charge up — 

Q. Yes, Yes. But see whether you can just an- 
swer the question. Is there air in the brake pipe 
all the time, regardless of whether the engineer 
turns on the emergency ? 

A. Oh yes. 

Q. There is pressure to operate a brake? 

A. Yes. 

Q. Does it operate by pressure, or is it released 
when the brake is set ? 

A. When the brake is set, the brake is operated 
by reducing the pressure in the brake pipe, causing 
this triple valve to operate and allowing pressure 
from a storage reservoir on the car to flow to the 
brake cylinder. The brake cylinder must operate for 
to have the brake apply. 

Q. You have condensed air in the cylinder ? [28] 

A. Yes. 

Q. And that released in its pressure operates the 
brake ? 

A. No. The air goes into the cylinder to operate 
the brake. 

Q. It is released to allow it to go into it to operate 
the brake? 



34 



United States of America vs. 



(Testimony of Mark Piircell.) 

A. Yes; it is released from the reservoir. 

Q. Well, if there is one car cut out, how does that 
effect the rest of them ? 

A. Cutting out — 

Q. Tell us that, whatever it is. 

A. Cutting a car out cuts out the triple valve, the 
auxiliary reservoir, and the brake cylinder. 

Q. On that car? 

A. Yes. 

Q. Are the rest of them in anywise dependent on 
that one? 

A. No. 

Q. Then why say, if the first car, if the brake 
there is not operating, it would be somewhat ineffi- 
cient ? What is the reason for that ? 

A. Because it may interfere with the prompt re- 
duction of pressure in the brake pipe. 

Q. Oh, you mean it would slow — 

A. It would slow it up. 

Q. How much? 

A. Well, that I could not say. Very little. 

Q. The pressure reduces all along that pipe for 
the same distance? 

A. No. It reduces from the forward end, the 
point where the reduction is made first. 

Q. Is the brake pipe connected throughout with 
valves, all along its length? 

A. It has its valves along its length at the end 
of each car. They must be opened through the train, 



Northern Pacific Railway Co. 35 

(Testimony of Mark Pureell.) 

except the rear one on the last car, in order to 

operate the brakes on all the cars. 

Q. Are they open all the time, or are they open 
while the brakes are being pnt into operation? 

A. They are open all the time while the train is 
operating. [29] 

Q. Well, I do not see why it is if one brake 
does not work, it involves the others. 

A. It does not, very much. 

Q. They are independent. If you reduce the 
pressure on this brake-pipe line at the front end, 
will it affect at the same instant the rear end — that 
is, instantaneously, without any appreciable dura- 
tion of time, if there are no valves interfering? 

A. It will affect the rear end of the train in a 
short time. 

The COURT: Have you anything further? 
By Mr. Acher : 

Q. How long does it take it for the air pressure 
in the train line to be decreased to permit the appli- 
cation in the rear of a 70-car train ? 

A. About ten or twelve seconds. 
By The Court: 

Q. That means that if the brake on the first car 
is applied, it will be ten or twelve seconds before the 
rear one is applied ? 

A. About that much. 

The COURT : Very well. 



36 United States of America vs. 

(Testimony of Mark Purcell.) 

Redirect Examination 
By Mr. Gunn : 

Mr. GUNN: I might say personally that the 
Court has in mind the same question that is in my 
mind, and that is this : 

Q. In the operation of an air line, as I under- 
stand it, it is not air from the engine, or air released 
by the engineer that actually moves the brake lever 
on the car. The lever on the car is moved by air con- 
tained in a tank on that car and stored there. The 
releasing of the air by the engineer in the cab is sim- 
ply to operate the triple valve on each car, that 
releases air in the tank attached to the car ? 

A. Yes, sir. 

Mr. GUNN: Does that make it clear to Your 
Honor ? 

The COURT: Proceed. 

Q. These valves you speak of in the end of each 
car, in the air line or train line, are simply a shut- 
off valve, and nothing like a vent valve or triple 
valve — just like a water faucet that you close or 
open, — [30] is that correct? 

A. Yes, sir. They are for the purpose of cutting 
out the brake line on an individual car when it is de- 
sired to set the car out of the train, or something 
of that kind. 

Q. And the fact remains that in closing what is 
referred to here as the shut-out cock on this eighth 



Northern Pacific Railway Co. 37 

(Testimony of Mark Purcell.) 

car did not interfere with the flow of air through the 
air line to all other cars in the rear of that car — that 
is correct, is it not ? 

A. No, sir. 

Mr. GUNN : Does that make it clearer to Your 
Honor's mind? 
By The Court: 

Q. Each car taps the brake pipe separately? 

The WITNESS: I did not understand Your 
Honor. 

Q. The brakes under each car from the reservoir 
tap the air-brake line separately? 

A. Yes, sir. 

Q. Very well. 

A. By means of the cross-over pipe, as they 
call it. 

Recross-Examination 
By Mr. Acher : 

Q. Mr. Purcell, is it not customary for the air 
reservoirs under each car to have a pressure of 
seventy pounds or ninety pounds — from seventy to 
ninety pounds — and the air in the train line to be 
kept at the same pressure when the brakes are not in 
application? The two are in constant pressure? 

A. Yes, sir. 

Q. And if you have the first car behind the engine 
with the brakes not operating, it prevents the air in 
the train line from being permitted to escape with 
sufficient suddenness to let the full pressure from the 



38 United States of America vs. 

(Testimony of Mark Purcell.) 

reservoir apply on the brakes with as much force 

and as quickly as if the car was in operation ? 

A. The brake on that car is cut out entirely, so 
that the raising and lowering of the pressure in the 
l)rake pipe does not aifect the pressure at the triple 
pipe at all. 

Q. And it delays the application on the second 
car ? That is what I meant. [31] 

A. To some extent. 

Q. That is the reason your rules forbid hauling 
the first car behind the engine with the brakes not 
in operation? 

A. Yes, sir; on account of the long pipe on the 
engine. 

Q. If that applies at the first car, it would apply 
to some extent in any part of the train, if the brakes 
were not CTit out. 

A. Yes. 

Q. That is, if the brakes were cut out ? 

A. Yes. 

Mr. ACHER: That is all. 

Re Direct Examination 
By Mr. Gunn : 

Q. As I understand it, the effect of having brakes 
cut out on any particular car other than the first car 
is not so pronounced as in the first car behind the 
tender — that is correct, is it not? 

A. That is correct, on account of the longer pipe 
on the engine. That pipe is longer than it is on a 



Northern Pacific Railway Co. 39 

(Testimony of Mark Purcell.) 

car. It provides a greater volume of piping in wliich 
the pressure must be reduced in affecting the triple 
valve on the next car, which would be the second 
car in the train if the first one were cut out. 

Q. As I understand it, the substance of your tes- 
timony further is this: That the running of this 
slack, that you referred to, is the movement of a car 
forwards and back with the application and release 
of the brakes ? 

A. Yes, sir. On account of there being more re- 
tarding force at one part of the train than at an- 
other. 

Q. The running of that slack to a car in the rear 
of a train with no car back of it having a braking 
power, is more damaging than the running of slack 
to the same car in the center of a train having a 
brake-powered car before and after it — is that cor- 
rect? 

Mr. ACHER : We make the same objection. Your 
Honor. 

The COURT: The objection is overruled. 

(The question was read to the witness) 

A. Yes, sir. It is more damaging where there is 
no braking power behind to help hold the weight of 
that car. [32] 

Q. In other words, in the center of a train you 
have two effective factors, one in front and one be- 
hind, to control the run of slack in a car without 
brakes; while if it is at the rear of the train, you 
simply have one factor — that is, the car ahead of 



40 United States of A m erica vs. 

(Testimony of Mark Purcell.) 

that, that has a tendency to control the running of 

that slack — is that correct? 

A. Yes, sir. 

Mr. GUNN: That is all. 

Mr. ACHER: Now, if Your Honor please, I 
move to strike the testimony of this witness on the 
grounds heretofore stated. 

The COURT : The motion is denied. 

Mr. ACHER : An exception, please. 



ROBERT FARRELL, 

called as a witness in behalf of the defendant, testi- 
fied as follows ; having been first duly sworn. 

Direct Examination 
By Mr. Gunn : 

My name is Robert Farrell. I am a conductor for 
the Northern Pacific Railway Company, residing at 
Missoula and operating' over the line of railroad 
from Helena to Butte and Paradise and Wallace. 
I have been a conductor twenty-nine years. 

Q. Mr. Farrell, you hear^ Mr. Purcell 's testi- 
mony, did you not? 

A. Yes, sir. 

Q. Do you agree substantially with what he had 
to say about the effect of operating in the center of 
a train and at the rear of a train a car with its 
brakes cut out? 



Northern Pacific Railway Co. 41 

(Testimony of Robert Farrell.) 

Mr. ACHER: One moment. To which we object, 
upon the ground that it is incompetent, irrelevant, 
and immaterial. We object to it upon the further 
ground that the witness is not shown to be qualified. 

The COURT: Oh, I think a man with twenty- 
nine years on the road as a conductor is somewhat 
familiar with air brakes. The objection is overruled. 
He may be allowed to answer. If his testimony is 
incompetent, it will be disregarded. 

Mr. ACHER: An exception, please. [33] 

A. I do. 

Q. Will you in your language explain to us the 
difference in the effect on you and on the equipment 
in your charge between operating at the rear of a 
train and in the center of a train a car with its 
brakes inoperative? 

Mr. ACHER: We object to the question on the 
further ground that this would have no application 
here. It would be the eighth car in question. 

The COURT : Well, a general explanation is ad- 
missible. 

A. If this car is placed behind any number of 
cars — seven or eight — in the train, it would not have 
any effect on the braking power of that train any- 
where — that is, noticeably — for the simple reason 
that during an emergency application of air — if the 
car next the engine is cut in — the triple valve goes 
into emergency and throws all the rest of them into 
emergency about the same time. If this car is on the 



42 United States of America vs. 

(Testimony of Robert Farrell.) 
rear end of the train next the caboose, I consider it 
the most dangerons place in the train to have it, on 
account of an inoperative ))rake next to the caboose. 

Q. Do I understand, then, that the run of slack 
at the rear of the train has a greater effect on the 
caboose than the run of slack further ahead in the 
train ? 

Mr. ACHER : We object to that, on the ground 
that it is unintelligible. 

(The question was read to the Court.) 

The COURT : The objection is overruled. 

A. Yes. It has a greater effect. 

Mr. GUNN: That is all. 

Mr. ACHER : We have no cross-examination. 
By The Court: 

Q. Let us see. Has the caboose an air brake ? 

A. Yes, sir. 

The COURT : Call the next witness. 



Mr. GUNN: Gentlemen, if it may be agreed that 
H. L. Whiteleather and R. C. Abeey, both conductors 
on the Northern Pacific Railway in actual service at 
the present time, are personally here in court ; and if 
called [34] to the stand, would testify substantially 
the same on direct and on cross-examination as Mr. 
Farrell, subject to the same objection and to the 
same exceptions, we can save some time. 

Mr. ACHER : Yes, provided it is also subject to a 



Northern Pacific Railway Go. 43 

(Testimony of Robert Farrell.) 

motion to strike all the testimony of the witnesses, on 

the grounds heretofore set forth. 

Mr. GUNN: Very well. 

The COURT : Overruled. 

Mr. ACHER: An exception, please. 

Mr. GUNN : That is, on direct and cross-exami- 
nation ? 

Mr. ACHER: Yes. 



T. P. LOWRY, 

called as a witness in behalf of the defendant, being 
first duly sworn, testified as follows : 

Direct Examination 
By Mr. Gunn : 

My name is T. F. Lowry, and I am assistant 
general manager of the Northern Pacific Railway 
Company, residing at Seattle, having under my jur- 
isdiction all lines west of Mission in Montana. I 
have been engaged in the railroad business fifty 
years, both in practical operation and as an execu- 
tive. I heard Mr. Purcell's testimony. 

Q. Do you agree substantially with — 

Mr. ACHER : We make the same objection. Your 
Honor. 

The COURT: The objection is overruled. 

Mr. ACHER : An exception, please. 

Q. (Concluded.) — him as to the effect of haul- 
ing the car with brakes inoperative in the center of 



44 United States of America vs. 

(Testimony of T. F. Lowry.) 

the train as compared to the effect of hauling it at 

the rear of the train ? 

A. I do. 

Q. Mr. Lowry, in this particular case the eighth 
car had its brakes cut out before reaching Paradise, 
and was not put to the rear of the train at Para- 
dise but was continued on to Missoula, the first re- 
pair point. Would it have taken any considerable 
length of time at Paradise to switch that car to the 
rear of the train ? 

Mr. ACHER : One moment. To which we object, 
upon the ground that the convenience to the carrier 
is incompetent, irrelevant and immaterial. 

The COURT : You may answer ; and if it is not 
competent it will be disregarded. [35] 

A. Yes, I do. 

The COURT : Just a moment. Read the question 
to the witness. 

(The question was read to the witness.) 

A. It would have. 

Q. Will you tell us why it would have taken con- 
siderable time ? 

A. Well, in the first place — 



Mr. ACHER 
The COURT 
Mr. ACHER 



We make the same objection. 

The same ruling. 

An exception, please. 
A. In the first place, these cars are usually dis- 
covered after the other work is out of the way. 
Switching this car out would have necessitated 
throwing the car out and putting the other seven cars 



Northern Pacific .Rail way Co. 45 

(Testimony of T. F. Lowry.) 

back into tlie train; then going to the extreme end 
of the yard, which is close to a mile, and switching 
it to the rear end. You could not make a move of 
that kind in probably less than thirty or thirty-five 
minutes, and everything would have to work very 
smoothly to make it in that time. 

Q. Mr. Lowry, it is agreed that the Northern 
Pacific transportation rule No. 1002 was in effect 
and is now in effect, and that it reads as follows: 

"Conductors and enginemen will give air 
brakes personal attention and will exact similar 
care from brakemen. They will not start a train 
from any point after switching has been done, 
cars set out or picked up, helper coupled to the 
rear of the train, engines changed, or where for 
any reason train pipe has been disconnected or 
angle cock closed, until after the proper test of 
air brakes has been made by trainmen and en- 
ginemen who have to control brakes." 

It is also agreed that at Paradise in this particular 
train a caboose was changed by the engine hauling 
the train. In view of this rule, after the change of 
that caboose it was necessary, was it not, to test the 
air brakes on that train ? 

A. Yes, sir. 

Q. And if this defect had been discovered at that 
time, not only would it have consumed time in 
switching a car to the rear of the train, but it would 
have also consumed time in making another test 
pursuant to this rule, would it not have? 



46 United States of America vs. 

(Testimony of T. F. Lowry.) 

A. Yes, sir. [36] 

Q. What effect does a delay of that kind have on 
the operation of a railroad ? 

Mr. ACHER: We object to that as incompetent, 
irrelevant, and inmiaterial. 

The COURT: The objection is sustained. Have 
you anything else ? 

Mr. GUNN: I have one or two witnesses along 
this line. 

The COURT: What is the purpose of this? 

Mr. GUNN: I was going to point out to the 
Court what I have in mind. I have in mind the rule 
with reference to a construction of a statute, that 
they must receive a sensible construction, such as will 
avoid an unjust and absurd consequence. 

The COURT: If Congress laid down a rule 
* * * Proceed. The Court takes note of the fact 
that such operations take time, of course, and has an 
effect on the schedule. Proceed. 

Mr. GUNN: Does Your Honor sustain the ob- 
jection ? 

The COURT : Oh yes. 

Q. Mr. Lowry, does it also involve additional 
expense ? 

Mr. ACHER : We make the same objection. 

The COURT: The Court takes judicial notice 
of that also — of that time and expense, of course. 
That will be sustained. 

Mr. GUNN: Another question, perhaps subject 
to the same objection. 



Narthern Pacific Railway Co. 47 

(Testimony of T. F. Lowry.) 

The COURT : I do not know. 

Q. Mr. Lowry, does it also affect the dispatching 
of trains and the meeting of trains ? 

Mr. ACHER : We make the same objection. 

The COURT : You may answer. 

A. Yes. 

Mr. GUNN: That is all. 

Cross-Examination 
By Mr. Acher: 

Q. Mr. Lowry, were you ever a conductor or an 
engineer ? 

A. No. 

Mr. ACHER: That is all. [37] 



Mr. GUNN: In view of the Court's ruling with 
reference to the testimony of Mr. Lowry, at this time 
we desire to make an offer of proof, as follows : 

Now comes the defendant and offers to prove by 
the witnesses J. H. Johnson, division superintendent 
for the Northern Pacific Railway Company; R. C. 
Abeey, conductor; Robert Farrell, conductor; and 
H. L. Whiteleather, a conductor, that the switching 
of the car having brakes inoperative — but having its 
air line in operation — out of and to the rear of tlie 
train requires considerable time, resulting in delay 
to the train, which not only is expensive, but may 
also interfere with the efficient operation of that 
train and other trains on that railroad. 

Mr. ACHER : We make the same objection — it is 
too general. 



48 United States of America vs. 

(Testimony of T. F. Lowry.) 

The COURT: The Court is quite satisfied. It is 
unnecessary to make proof of that. The objection is 
sustained. Have you anything more, Mr. Acher? 

Mr. ACHER : No. But we wish at this time to 
make a motion. 

The COURT: Very well. 

Mr. ACHER: Comes now the plaintiff and 
moves the Court upon the agreed statement of facts 
and other evidence herein to render judgment in 
favor of the plaintiff and against the defendant, 
upon the ground and for the reason that it affirma- 
tively appears from the undisputed facts that the 
plaintiff is entitled to recover in this action. I make 
this for the purpose of the record. Your Honor. 

Mr. GUNN: To which defendant objects. 



Thereupon said cause was taken under advisement 
by the court, thereafter briefs were filed by the re- 
spective parties and upon March 15, 1934, the court 
rendered its 

WRITTEN DECISION AS FOLLOWS : 
[Title of Court and Cause.] 

No. 1621 

These cases involve hours of service and opera- 
tion of trains, respectively. * * * 

(That portion of the decision relating to a case 
involving the hours of service act and not here ma- 
terial is omitted.) 



Northern Pacific Raihvay Co. 49 

The second case is submitted on an agreed state- 
ment of facts, and consistent testimony, by which it 
appears that departing Spokane for Livingston, 
defendant's freight train was 73 cars and caboose 
equipped [38] with air-brakes in order and use. 

Before reaching Paradise, on the eighth car from 
the tender the brake was cut out for cause, but the 
air-line continued to function. 

Said town was not then a repair point though it 
had been, and it was then a terminal with facilities 
to break and make local freight trains as necessary, 
road engines doing the work and they, caboose and 
crew there changed. 

That the air-brake was cut out was discovered by 
the new crew as the train "was moving out of Para- 
dise," and without change the train necessarily pro- 
ceeded to Missoula, the first repair point out of Spo- 
kane and the nearest available, where the car was 
set out. 

Amongst other things the statute (T. 45 U. S. C. 
A. Sec. 9) provides that "all power-braked cars in 
such train which are associated together . . . shall 
have their brakes so used and operated ' ' by the engi- 
neer. 

Any power-braked car is "associated" with other 
like cars when, like the car involved, its air-brake 
is cut out and its air-line is continued in use in the 
engineer's operation of air-brakes on cars beyond it. 

See N. Y. etc. Co. vs. U. S. 265 U. S. 41. 

The original statute (Sec. 9 supra) imposes an 
absolute duty in behalf of public policy, and to that 



50 United States of America vs. 

end excludes all inquiry in respect to knowledge, 
motive, intent, diligence, accident. 

See C. B. & Q. Ry. vs. U. S., 220 U. S. 578. 

Whenever, however, wherever, a secure air-brake 
car associated with like cars, in use became insecure, 
any further substantial operation of it incurred the 
penalty. 

Of course it could be moved to clear tracks and to 
repair, but probably none the less the j)enalty, if 
thereby was substantial operation. 

To some relieve the hardship is the amendment 
(T. 45 U. S. C. A., Sec. 13) which provides that a 
car equipped with secure air-brake in use becoming 
insecure, and likewise in respect to other equipment 
prescribed, if necessary can be hauled to the nearest 
available repair point, without penalty. 

Contrary to plaintiff's contention, this section does 
not limit such haulage to the defective car as a sepa- 
rate unit, but contemplates haulage of the car "as 
is," associated in a train. 

See Erie etc. Co. vs. U. S., 240 Fed. 28. [39] 

And from this construction of the section is a 
single exception, viz: if the car is defective to the 
extent it must be coupled with chains, it must not 
be hauled "as is" or in trains unless loaded with 
livestock or perishable freight. 

Expressio unius, etc. 

Plaintiff further contends that be this granted, 
yet the defective car must ])e disassociated from 
other air-brake cars and placed at the rear end of 
the train, citing N. Y. etc. Co. v. U. S. supra. 



Northern Pacific Railway Co. 51. 

But that case so decides only when the car is 
hauled past an available repair point, which is 
not the instant case. 

In support of plaintiff's contention is nothing 
in the statute. Section 9 prohibits and penalizes 
hauling a car with cut-out air-brakes in association 
with other air-brake cars. 

Section 13 so far relieves from prohibition and 
penalty, that if the cut-out occurs in transit, if 
necessary the car may be hauled — to the nearest 
available point of repair. 

In so far as haulage of air-brake cars is con- 
cerned, both section 9 and 16 contemplate them in 
association, and nothing in the latter liberally con- 
strued imports haulage in disassociation. 

As Section 9 neither prohibited nor penalized 
haulage of a cut-out air-brake car disassociated 
from others, section 13 is unnecessary to authorize 
or relieve from consequences of any such haulage. 

As some useful purpose must have inspired 
section 13, the only reasonable inference is the 
purpose is to relieve from what section 9 does for- 
bid, viz: haulage of such defective car in asso- 
ciation with other like air-braked cars. 

Defendant is within section 13, and plaintiff is 
not entitled to recover any penalty. 

Judgments accordingly. 

BOURQUIN, J. 

Filed March 15, 1934. 

C. R. Garlow, Clerk. 



52 United States of America vs. 

Thereafter the Court duly made and entered an 
order herein as follows: [40] 

[Title of Court and Cause.] 

No. 1621 
ORDER 

On motion of Mr. A. P. Acher, Assistant U. S. 
Attorney, court ordered that the Plaintiff's Ex- 
ception to the ruling and order of the court deny- 
ing the Plaintiff's motion for judgment in favor 
of Plaintiff and against defendant, is hereby noted. 

Court further ordered that Plaintiff be granted 
Five Days in addition to the time allowed by rule 
in which to prepare and serve its proposed Bill of 
Exceptions herein. 

Entered March 26, 1934. 

C. R. GARLOW, Clerk. 



And now the plaintiff*, within the time allowed 
by law, lodges this its proposed bill of exceptions 
herein and asks that the same be signed, settled 
and allowed. 
March 27, 1934. 

JAMES H. BALDWIN 

United States Attorney 
ARTHUR P. AC^HER 

Assistant U. S. Attorney 
M. C. LIST 

Special Assistant to the 
United States Attorney 



Northern Pacific Railway Co. 53 

Service of the foregoing proposed bill of ex- 
ceptions admitted and receipt of copy thereof ac- 
knowledged this 27th day of March, 1934. 

GUNN, RASCH & HALL 
Attorneys for the Defendant. [41] 



STIPULATION 

IT IS HEREBY STIPULATED AND 

AGREED by and between the parties hereto that 

the above and foregoing may be signed, settled and 

allowed herein as and for a true Bill of Exceptions. 

JAMES H. BALDWIN, 

U. S. Attorney 
ARTHUR P. ACHER 

Asst. U. S. Attorney 
M. C. LIST 

Special Asst. 

Attorneys for the Plaintiff. 
GUNN, RASCH & HALL 

Attorneys for the Defendant. [42] 



CERTIFICATE 

The undersigned Judge, who tried the above en- 
titled cause, hereby certifies that the above and 
foregoing is a full, true and correct bill of excep- 
tions in said cause, and contains all of the evidence 
introduced, the proceedings had, and exceptions 
taken in the trial of said cause except a certain 



54 United States of America vs. 

map introduced in evidence. This map, showing- 
the yards of the Northern Pacific Railway Com- 
pany at Paradise, Montana, in the opinion of the 
Court is necessary and proper that the Circuit 
Court of Appeals inspect in its original form upon 
appeal herein in accordance with the provision of 
Rule 14 of the rules of the Circuit Court of Ap- 
peals for the Ninth Circuit, and said original ex- 
hibit is by this reference made a part of this bill 
of exceptions as if it had been set forth here in 
length, and therefore 

IT IS ORDERED that the above and foregoing 
be allowed, settled and approved as a true and 
correct bill of exceptions herein. 

IT IS FURTHER ORDERED that the Clerk of 
this Court shall certify to the Clerk of the Circuit 
Court of Appeals the map introduced in evidence 
herein to be considered by the (^ircuit Court of 
Appeals as a part of this bill of exceptions. 

Dated this 6 day of April, 1934. 

BOURQUIN, Judge. 

[Endorsed]: Filed April 6, 1934. [43] 



Thereafter, on April 10, 1934, Petition for Ap- 
peal was duly filed herein, in the words and figures 
following, to-wit : [44] 

[Title of Court and Cause.] 

PETITION FOR APPEAL 

Comes now the plaintiff, the United States of 
America, by its attorneys, and feeling itself ag- 



Northern Pacific Railway Co. "56 

grieved by the rulings of the C^oiirt during the trial 
of this cause and the final judgment entered herein, 
on March 23, 1934, hereby prays that an appeal be 
allowed by the United States District Court for the 
District of Montana, Missoula Division, to the 
United States Circuit Court of Appeals for the 
Ninth Circuit, and in connection with this petition 
plaintiff herewith presents its Assignment of Errors. 
Dated this 5th day of April, 1934. 
JAMES H. BALDWIN 

United States Attorney 
DONALD J. STOCKING 

Assistant United States Attorney 
M. C. LIST 

Special Assistant to the 
United States Attorney. 

Attorneys for Plaintiff. 

Service of the copy of this Petition for Appeal 
admitted this 5th day of April, 1934. 

GUNN, RASC^H & HALL 
Attorneys for Defendant. 

[Endorsed]; Filed April 10, 1934. [45] 



Thereafter, on April 10, 1934, Assignment of 
Errors was duly filed herein in the words and figures 
following, to-wit: [46] 

[Title of Court and Cause.] 

ASSIGNMENT OF ERRORS. 

Comes now the plaintiff, the United States of 
America, by its attorneys, and in connection with 



5^ United States of America vs. 

its Petition for Appeal, says, that in the record and 
proceedings in the above entitled cause, manifest 
error has intervened to the prejudice of the plain- 
tiff, upon which it mil rely in the prosecution of 
its appeal herein, to-wit : 

I. 

The Court erred in refusing to enter judgment in 
favor of the plaintiif and against the defendant, as 
requested by plaintiff at the close of the testimony, 
to which action of the Court plaintiff duly excepted. 

II. 

The Court erred in entering judgment in favor of 
the defendant and against the plaintiff. 

III. 

The Court erred in entering judgment for defend- 
ant and in holding that defendant did not violate 
the provisions of the Safety Appliance Acts and the 
Order of the Interstate Commerce Commission by 
hauling a power-braked car with inoperative brakes, 
as the eighth car of a 76 car train, past Paradise, 
where there were ample switches and facilities, with- 
out switching such <*,ar to the rear of the power- 
braked cars having their power brakes used and 
operated by the engineer. 

IV. 

The Court erred in overruling plaintiff's objec- 
tion to the following question asked of the witness 
Purcell by counsel for the [47] defendant and per- 



Northern Pacific Ra/ilway Co. 57 

mitting said witness to reply thereto, to which action 
of the court plaintiff then and there duly excepted : 

Q. Mr. Pureell, I will ask you whether it is 
safer to operate a car witli the brakes thereon 
inoperative, but having its air line in operation, 
in the center of a train and among and/or asso- 
ciated with other cars having their l^rakes oper- 
ated by the engineer, than it is at the rear of 
the train and behind all cars having their 
brakes operated by the engineer? 

A. It is safer. 

V. 

The Court erred in overruling plaintiff's objec- 
tion to the following question asked of the witness 
Purcell by counsel for the defendant and permit- 
ting said witness to reply thereto, to which action of 
the Court plaintiff then and there duly excepted: 

Q. I will ask you whether it is dangerous to 
persons and property to operate such a car at 
the rear of all the cars in the train having their 
brakes operated b}^ the engineer? 
A. Yes, sir. 

VI. 
The Court erred in overruling plaintiff's objec- 
tion to the following question asked of the witness 
Purcell by counsel for the defendant and permit- 
ting said witness to reply thereto, to which action of 
the court plaintiff then and there duly excepted: 

Q. I will ask you whether allowing such a 
car to remain among and/or associated with 



58 United States of America vs. 

power-braked cars having their brakes oper- 
ated by the engineer, reduced the braking effi- 
ciency of the train? 
A. It does not reduce the braking efficiency. 

VII. 

The Court erred in overruling plaintiff's objec- 
tion to the following question asked of the witness 
Purcell by counsel for the [48] defendant and per- 
mitting said witness to reply thereto, to which action 
of the court plaintiff then and there duly excepted : 

Q. Will you explain your answer as briefly 
as possible, and in language that a layman, a 
judge, and attorneys can understand, if you 
please ? 

A. Having cars in a train with brakes cut 
out tends to cause slack to run and to inter- 
change in the train — ^slack that is damaging to 
the drawbars and that is also liable to injure 
persons. If the cars so cut out, or so rendered 
inoperative as regards brakes, are distributed 
throughout the train, the running of slack is re- 
duced, while the placing of those cars — one or 
more than one car — together at the rear of the 
train tends to increase the severity and the lia- 
bility of slack interchanging at that point. 

VIII. 

The Court erred in overruling plaintiff's objec- 
tion to the following question asked of the witness 
Purcell by counsel for the defendant and permit- 
ting said witness to reply thereto, to which action 
of the court plaintiff then and there duly excepted : 



Northern Pacific Railway Co. 59 

Q. Will you explain why allowing such a car 
to remain among and/or associated with other 
cars having their power brakes operated by the 
engineer does not reduce the braking efficiency 
of the train ? 

A. Each brake has its effect in retarding the 
movement of the train. Where one is cut out 
and rendered inoperative, there is that much 
less braking power. If that car is placed at the 
rear of the train, the lack of braking power is 
the same in effect as if the car were somewhere 
else in the train — just as much less power brake 
as if the car had its brakes operative. [49] 

IX. 

The Court erred in overruling plaintiff's ol)jec- 
tion to the following question asked of the mtness 
Purcell by counsel for the defendant and permitting 
said witness to reply thereto, to which action of the 
court plaintiff then and there duly excepted : 

Q. So that if that car is in the center of the 
train or at the rear of the train without its 
brakes operating, there is a loss of braking 
power to the extent of the weight of that car, 
and only that loss, wherever it may be? 
A. Yes, sir. 

X. 
The Court erred in overruling plaintiff's motion 
to strike from the record the testimony of the wit- 
ness Purcell, to which action of the court plaintiff 
then and there duly excepted. 



60 United States of America vs. 

XI. 

The Court erred in overruling plaintiff's objec- 
tion to the follo^Adng question asked of the witness 
Farrell by counsel for the defendant and permitting 
said witness to reply thereto, to which action of the 
court plaintiff then and there duly excepted: 

Q. Do you agree substantially with what he 
(Purcell) had to say about the effect of oper- 
ating in the center of a train and at the rear of 
a train a car with its brakes cut out? 
A. I do. 

XII. 
The Court erred in overruling plaintiff's motion 
to strike from the record the testimony of the wit- 
nesses Farrell, Whiteleather, and Abeey, it being 
agreed that the testimony of the latter two if called 
as witnesses would testify substantially the same on 
direct and on cross examination as the witness 
Farrell, to which action of the court plaintiff then 
and there duly excepted. 

XIII. 

The Court erred in overruling plaintiff's objec- 
tion to the following question asked of the witness 
Lowry by counsel for the [50] defendant and per- 
mitting said witness to reply thereto, to which action 
of the court plaintiff then and there duly excepted : 

Q. Do you agree substantially with him as 
to the effect of hauling the car with brakes in- 
operative in the center of the train as compared 
to the eff'ect of hauling it at the rear of the 
train? 

A. I do. 



Nortlicrn Pacific BaiJ/rai/ Co. 61 

XIV. 

The Court erred in overruling plaintiff's objec- 
tion to the following question asked of the witness 
Lowry by counsel for the defendant and permitting 
said witness to reply thereto, to which action of the 
court plaintiff then and there duly excepted: 

Q. Will you tell us why it would have taken 
considerable time'? (Referring to the previous 
statement that it would have taken considerable 
time at Paradise to switch that car to the rear 
of the train.) 

A. In the first place, these cars are usually 
discovered after the other work is out of the 
way. Switching this car out would have neces- 
sitated throwing the car out and putting the 
other seven cars back into the train ; then going 
to the extreme end of the yard, which is close to 
a mile, and switching it to the rear end. You 
could not make a move of that kind in probably 
less than thirty or thirty-five minutes, and 
everything would have to work very smoothly 
to make it in that time. [51] 

WHEREFORE, for such errors, plaintiff prays 
that said judgment of the United States District 
Court for the District of Montana, Missoula Di- 
vision, dated March 23, 1934, be set aside and va- 



62 United States of America vs. 

cated and this cause remanded for a new trial. 

JAMES H. BALDWIN, 

United States Attorney. 
DONALD J. STOCKING, 
Assistant United States Attorney. 
M. C. LIST, 

Special Assistant to the 
United States Attorney. 
Attorneys for Plaintiff. 

Service of the foregoing Assignment of Errors 
admitted this 5th day of April, 1934. 

GUNN, RASCH & HALL, 
Attorneys for Defendant. 

[Endorsed] : Filed April 10, 1934. [52] 



Thereafter, on April 10, 1934, Order Allowing Ap- 
peal was duly filed herein, in the words and figures 
following, to-wit : [53] 

[Title of Court and Cause.] 

ORDER ALLOWING APPEAL. 

The plaintiff in the above entitled cause having 
prayed for the allowance of an appeal to the United 
States Circuit Court of Appeals for the Ninth Cir- 
cuit from the proceedings and judgment made and 
entered herein by the United States District Court 
for the District of Montana, Missoula Division, on 
March 23, 1934, and from each and every part 
thereof, and having presented and filed its Petition 



Northern Pacific Railway Co. 63 

for Appeal, Assignment of Errors and prayer for 
reversal pursuant to the statute and rules in such 
case made and i)rovided ; 

IT IS NOW HEREBY ORDERED that an ap- 
peal be, and the same is hereby allowed to the 
United States Circuit Court of AjDpeals for the 
Ninth CircTiit from the District Court of the United 
States for the district of Montana, Missoula Di- 
vision, as provided by law, and it is 

FURTHER ORDERED that the Clerk of this 
Court shall prepare and certify a Transcript of 
Record, proceedings and judgment in this cause and 
transmit the same to the United States Circuit Court 
of Appeals for the Ninth Circuit so that he shall 
have the same in the said Court within thirty days 
from this date. 

Dated this 10 day of April, 1934. 

BOURQUIN, 
United States District Judge for the 
District of Montana. 

[Endorsed] : Filed April 10, 1934. [54] 



Thereafter, on April 10, 1934, Stipulation for 
Diminution of Record was duly filed herein, in 
words, and figures following, to-wit : [55] 

[Title of Court and Cause.] 

STIPULATION FOR DIMINUTION 
OF RECORD. 

IT IS HEREBY STIPULATED by and between 
the parties hereto, that in the printing of the 



64 United States of America vs. 

Transcript of Record herein, the title of the Court 
and the title of the cause on the pleadings and docu- 
ments need not be printed in full, but may be en- 
titled thus ("Title of Court and Cause"), and that 
the endorsements on such papers and documents, ex- 
cept the filing endorsements may also be omitted. 
Dated this 5th day of April, 1934. 

JAMES H. BALDWIN, 

United States Attorney. 
DONALD J. STOCKING, 
Assistant United States Attorney. 
M. C. LIST, 

Special Assistant to the 
United States Attorney. 
Attorneys for Plaintiff. 
GUNN, RASCH & HALL, 
Attorneys for Defendant. 
It is so ordered : 



United States District Judge 
for the District of Montana. 



[Endorsed] : Filed April 10, 1934. [56] 



Thereafter, on April 10, 1934, Citation was duly 
filed herein, the original Citation being hereto an- 
nexed and being in the words and figures follow- 
ing, to-wit : [57] 



Northern Pacific Ra/ilway Co. 65 

[Title of Court.] 

United States of America. — ss. 

THE PRESIDENT OF THE UNITED STATES 
OF AMERICA. 

To the Northern Pacific Railway C^ompany, a Cor- 
poration, and to Howard Toole and Gunn, 
Rasch & Hall, its attorneys, Greeting: 
YOU ARE HEREBY (^ITED AND ADMON- 
ISHED to be and appear at a United States Circuit 
Court of Appeals for the Ninth Circuit, to be 
holden at the City of San Francisco, California, 
within thirty days from the date hereof, pursuant 
to an order allowing an appeal, of record in the 
Clerk's Office of the United States District Court 
for the District of Montana, Missoula Division, 
wherein the United States of America is appellant 
and the Northern Pacific Railway Company is ap- 
pellee, to show cause, if any there be, why judgment 
rendered against the said plaintiff herein and ap- 
pellant in said appeal mentioned should not be cor- 
rected and why speedy justice should not be done 
to the parties in that behalf. 

WITNESS, the Honorable George M. Bourquin, 
United States District Judge for the District of 
Montana, this 10 day of April, 1934. 

BOURQUIN 
United States District Judge 
for the District of Montana. 

Service of this Citation admitted this 10th day 
of April, 1934. 

GUNN, RASCH & HALL 
Attorneys for Appellee. 

[Endorsed] : Filed April 10, 1934. [58] 



66 United States of America rs. 

Thereafter, on April 10, 1934, Praecipe for Tran- 
script of Record was duly filed herein, in words and 
figures following, to-wit : [59] 

[Title of Court and Cause.] 

PRAECIPE 

To the Clerk of the above entitled Court : 
Sir: 

Please prepare record on appeal to the United 
States Circuit Court of Appeals for the Ninth 
Circuit in the above entitled cause, and include 
therein the following papers and documents: 

1. Summons and Marshal's return. 

2. Complaint. 

3. Answer. 

4. Bill of Exceptions. 

5. Judgment. 

6. Assignment of Errors. 

7. Petition for Appeal. 

8. Order Allowing Appeal. 

9. Stipulation and Order for Diminution of 
Record. 

10. C^itation. 

11. Clerk's (Certificate. 

12. This Praecipe. 

Dated this 5th day of April, 1934. [60] 
JAMES H. BALDWIN 

United States Attorney 
DONALD J. STOCKING 

Assistant United States Attorney 
M. C. LIST 

Special Assistant to the 
United States Attorney 
Attorneys for Plaintiff. 



Northern Pacific Railway Co. 67 

Service of the within praecipe admitted this 5th 
day of April, 1934. 

GUNN, RASCH & HALL 
Attorneys for Defendant. 

[Endorsed] : Filed April 10, 1934. [61] 



CLERK'S CERTIFICATE TO TRANSCRIPT 
OF RECORD. 

United States of America, 
District of Montana. — ss. 

I, C. R. Garlow, Clerk of the United States Dis- 
trict Court for the District of Montana, do hereby 
certify and return to The Honorable, The United 
States Circuit Court of Appeals for the Ninth Cir- 
cuit, that the foregoing volume consisting of 61 
pages, numbered consecutively from 1 to 61 inclu- 
tive, is a full, true and correct transcript of the 
record and proceedings in the therein entitled cause, 
as appears from the original records and files of 
said court in my custody as such Clerk; and I do 
further certify and return that I have annexed to 
said transcript and included within said pages the 
original Citation issued in said cause. 

I further certif}^ that the costs of said transcript 
of record amount to the sum of $14.65, and have 
been made a charge against the Appellant. 

WITNESS my hand and the seal of said court at 
Helena, Montana, this April 25th, A. D. 1934. 

[Seal] C. R. GARLOW, 

Clerk as aforesaid. [62] 



68 United States of America vs. 

[Endorsed]: No. 7469. United States Circuit 
Court of Appeals for the Ninth Circuit. United 
States of America, Appellant, vs. Northern Pacific 
Railway Company, Appellee. Transcript of Record. 
Upon Appeal from the District Court of the United 
States for the District of Montana. 

Filed April 28, 1934. 

PAUL P. O'BRIEN, 
Clerk of the United States Circuit Court of Appeals 
for the Ninth Circuit. 



Ko. 7469 

In the United States Circuit Court of 
Appeals for the Ninth Circuity/ 



The United States of AmericA;, appellant 

V. 

Northern Pacific Railway Company, appellee 



APPEAL FROM THE DISTRICT COURT OF THE UNITED 
STATES FOR THE DISTRICT OF MONTANA, MISSOULA DIVI- 
SION 



BRIEF AND ARGUMENT FOR APPELLANT 



JAMES. H. BALDWIN, 

United States Attorney. 
R. LEWIS BROWN, 
Assistant United States Attorney. 
M. C. LIST, 
Special Assistant to tJie United States Attorney. 

Attorneys for Appellant. 



FILED 

JUL 28 1934 

PAUL P. O'BRIEN, 

CUERK 



CONTENTS 



Page 

Statement of facts 1 

Allegations of complaint 2 

Answer 3 

Pertinent stipulated facts 3 

Assignments of error 5 

Questions involved 6 

Acts and order 1, 7 

Argument 8 

Conclusion 18 

CASES CITED 

C. & 0. Ry. V. United States, 249 Fed. 805 11 

C. B. & Q. R. V. United States, 220 U.S. 559 8 

G. H. & S. A. V. United States, 183 Fed. 579 16 

G. H. & S. A. V. United States, 199 Fed. 891 15 

Great Northern Ry. v. United States, 244 Fed. 406 15 

L. & J. B. Co. V. United States, 249 U.S. 534 14, 18 

N. Y. C. R. V. United States, 265 U.S. 41__ 12, 13, 14, 15, 16, 18, 19, 20 

Penna Co. v. United States, 241 Fed. 824 15 

St. L. I. M. & S. V. Taylor, 210 U.S. 281 8, 9 

Saltonstall v. Russell, 152 U.S. 628 3 

Virginian Ry. v. United States, 223 Fed. 748 15 

U) 



71008—34- 



In the United States Circuit Court of 
Appeals for the Ninth Circuit 



No. 7469 



The United States of America, appellant 

V. 

Northern Pacific Railway Company, appellee 



APPEAL FROM THE DISTRICT COURT OF THE UNITED 
STATES FOR THE DISTRICT OF MONTANA, MISSOULA 
DIVISION 



BRIEF AND ARGUMENT FOR APPELLANT 



STATEMENT OF FACTS 

This case involves an alleged violation of an Or- 
der of the Interstate Commerce Commission, issued 
pursuant to the provisions of Section 2 of the Act of 
March 2, 1903 (32 Stat. L., 943; U.S. Code, title 45, 
sec. 9), commonly known as the Safety Appliance 
Act, which Order reads as follows : 

It is Ordered : That on and after Septem- 
ber 1, 1910, on all railroads used in interstate 
commerce, whenever, as required by the 
Safety Appliance Act as amended March 2, 
1903, any train is operated with power or 
(1) 



train brakes, not less than 85 per cent of the 
cars of such train shall have their brakes 
used and operated by the engineer of the 
locomotive drawing such train, and all 
power-brake cars in every such train which 
are associated together ivith the 85 per cent 
shall have their brakes so used and operated. 

The italicized portion indicates that part of the 
Order involved herein. 

ALLEGATIONS OF COMPLAINT 

Briefly stated, the complaint alleges that on 
August 4, 1933, appellee operated a certain train 
over its line from Paradise, Mont., consisting of 
74 cars, locomotive 1848, and tender, all of which 
were equipped with power or train brakes, but the 
eighth car in the train, N.P. refrigerator car 93305, 
had its power or train brakes cut out so that they 
could not be used and operated by the engineer ; or 
stated in another way, while there were over 85% 
of the power-braked cars associated together be- 
hind the car with cut-out brakes, there were not 
85% of the operable power-braked cars associated 
together immediately behind the locomotive and 
tender of such train (Rec. 2). 

THE ANSWEH 

In view of the fact that the case was submitted 
upon an agreed statement of facts, supplemented 
by. some little testimony, the insufficiency of the 
answer may be ignored. Saltonstall v. Russell, 152 
U.S. 628. 



It is sufficient to say that appellee's defense was 
that the movement of car 93305 out of Paradise, as 
the eighth car in the train, was a necessary move- 
ment for repair of that car (Rec. 7), whereas, 
all that was required was the dissociation of car 
93305 from the other power-braked cars in such 
train by placing it to the rear of all such cars hav- 
ing their power brakes operated by the engineer. 

PERTINENT STIPULATED FACTS 

This train was made up in Yardley Yard, Spo- 
kane, and left there on August 3d for Laurel, Mont, 
At that time all the cars in such train had their 
power or train brakes used and operated by the 
engineer, but somewhere between Yardley Yard 
and Paradise it was found that the brakes on the 
eighth car were not working properly. A brake- 
man then turned or closed the cut-out cock on the 
crossover pipe of this car so that its brakes could 
no longer be operated by the engineer, but this did 
not interfere with the operation of all other power- 
braked cars in the train by the engineer. In this 
condition the train was operated into Paradise 
where it arrived at 8:10 a.m. Pacific Time, on 
August 4th (Rec. 16, 17). 

Paradise is not simply a way station or passing 
point for this or any other train. It is a terminal 
in every sense of the word, except that switching 
is done there with road instead of switching en- 
gines. It is on the main line, and all trains oper- 
ated between Missoula and Yardley Yard, both 



passenger and freight, have their engine and train 
crews changed there, as well as cabooses of freight 
trains (Rec. 15). Local trains are made up and 
end their runs there. There is a large yard at 
Paradise, with sufficient switches and cross-over 
tracks for all purposes. All trains before leaving 
there have their power or train brakes tested by the 
engine and train crews thereof, but only for the 
purpose of placing ''cut-out" cards on all cars 
found to have cut-out power or train brakes 
(Rec. 17). 

This train remained at Paradise 40 minutes — 10 
minutes for coaling and taking water, 20 minutes 
for changing crews and cabooses, and 5 minutes for 
the air-brake test, all of which work was done by 
the new crew. No member of the new train crew 
had discovered that car 93305 had its brakes cut out 
before it left Paradise, nor had it been so carded 
by the incoming crew. The cut-out brakes on this 
car were noticed by the new conductor as the train 
was pulling out of Paradise and he placed a "cut- 
out" card on it at the next station (Rec. 19). 

It should be noted that had every member of both 
incoming and outgoing train and engine crews 
known that the car in question had its power brakes 
cut out, no effort would have been made to disso- 
ciate it from the other power-braked cars in the 
train, although the car admittedl}^ could have been 
switched to the rear end of the train at Paradise 
(Rec. 18). Instead, the train was permitted to 



leave Paradise for Laurel with the car in the condi- 
tion complained of, but at Missoula the car was 
taken out of the train, its brakes cleaned and a new 
triple valve installed (Rec. 19). 

At the trial of the case, over the Government's 
objections, appellee was permitted to show that it 
was safer to operate this train as it did than had 
the car with defective brakes been placed to the 
rear of the train (Rec. 23). This evidence was 
offered on the theory that it would enable the trial 
Court to arrive at the proper construction of the 
Act and Order, notwithstanding that they had been 
already construed by the Supreme Court. Such 
testimony was clearly inadmissible for that or any 
other purpose. 

ASSIGNMENTS OF EKROR 

(Rec. 55) 

While there are a number of Assignments, it is 
believed that they can be better considered in 
groups. 

I, II, and III 

These relate to the refusal of the Court to grant 
the Government's motion to enter judgment in its 
favor, to the action of the Court in entering judg- 
ment against the Government and in favor of ap- 
pellee, and the action of the Court in holding that 
appellee did not violate the provisions of the Acts 
and Order in hauling a car with inoperative power 
brakes as the eighth car in a 76-car train, past Para- 



dise, where it was admitted that ample facilities 
existed for switching such car to the rear of all 
other power-braked cars in such train. 

IV-X 

These relate to the testimony of appellee's ex- 
pert witness to the effect that to comply with the 
Government's contention would be more dangerous 
than what appellee actually did in the instant case, 
such testimony being offered "for the enlighten- 
ment of the Court, and in explanation of the exact 
situation to be used in the construction of the 
statute as regards that question." Assignment X 
particularly relates to appellant's motion to strike 
from the record all the testimony of this expert. 

The remaining Assignments are not stressed. 

QUESTIONS INVOLVED 

1. When a train consisting of 76 cars, all of 
which are equipped with power brakes and in good 
order upon leaving its initial terminal, and the 
power brakes on one of the cars are cut out en- 
route on account of failure of the brake apparatus 
to operate, may the car with inoperative power 
brakes be hauled from an intermediate terminal in 
association with other power-braked cars in such 
train, or must such car be placed to the rear of all 
other power-braked cars in that train ? 

2. Does the proviso in section 9 of the Code, giv- 
ing a carrier the right to move a defective car for 



repair, apply to the movement of a train containing 
a car with inoperative power brakes associated 
with other operative power-braked cars in such 
train, when such movement is not necessary to 
break such association; that is, may such train be 
moved for the purpose of repairing the car with 
inoperative power brakes ? 

3. Is expert testimony as to the relative dangers 
involved in hauling a car with cut-out power brakes 
in different locations in a train relevant in aiding 
a trial court in arriving at a proper construction 
of the Act? 

THE STATUTE 

That part of the statute that is particularly in- 
volved in this case is contained in Title 45, section 
9, of the Code, and reads as follows : 

Whenever, as provided in this chapter, 
any train is operated with power or train 
brakes not less than 50 per centum of the 
cars in such train shall have their brakes 
used and operated by the engineer of the 
locomotive drawing such train; and all 
power-braked cars in such train which are 
associated together with said 50 per centunt 
shall have their brakes so used and operated ; 
and, to more fully carry into effect the ob- 
jects of said chapter, the Interstate Com- 
merce Commission may, from time to time, 
after full hearing, increase the minimum 
percentage of cars in any train required to 
be operated with power or train brakes 

71008—34 2 



8 

which must have their brakes used and oper- 
ated as aforesaid; and failure to comply 
with any such requirement of the said Inter- 
state Commerce Commission shall be sub- 
ject to the like penalty as failure to comply 
with any requirement of this section. 

Under authority granted to it in the section of 
law just quoted, the Commission under date of June 
6, 1910, by order, increased the percentage to 85%. 

ARGUMENT 

Under section 9 of the Code, as modified by the 
Commission's Order of June 6, 1910, a carrier is 
bound to have a minimum of 85% of the cars in a 
train equipped with power or train brakes used and 
operated by the engineer, and all power-braked cars 
which are associated together with the said 85% 
must also have their brakes so used and operated. 

The Supreme Court of the United States held the 
Acts to be mandatory and absolute in their require- 
ments : 

St. L. I. M. d S. Ry. V. Taylor, 210 U.S. 
281, 295. 

C. B. d Q. R. V. United States, 220 U.S. 
559, 577. 

In the Burlington case, supra, the Court said, p. 

577: 

To avoid misapprehension, it is appropri- 
ate to say that we are not to be understood as 
questioning the soundness of the interpreta- 
tion heretofore placed by this Court upon the 



Safety Appliance Act. We only mean to 
say that until Congress, by an amendment of 
the statute changes the rule announced in 
the Taylor case, this Court will adhere to and 
apply that rule. 

For the purpose of relieving somewhat the harsh- 
ness of the absolute features of the Acts, on April 
14, 1910, Congress provided a way for the necessary 
movement of a car with defective safety appliances 
for purposes of repair. The following excerpt 
from Senate Report No. 250, dated February 18, 
1910, which is the basis or reason for this relieving 
statute, is pertinent : 

The amendment proposed permitting 
movement without penalty of a defective car 
to a repair shop, when necessary, is deemed 
advisable, as the Supreme Court of the 
United States, in the Taylor case, held that 
the present act, which this act amends and 
supplements, is absolute, and there is there- 
fore great doubt as to the right of a railroad 
to move even a defective car to a point of 
repair without incurring the penalties of the 
act. (Our italics.) 

Attention is called to the fact that nowhere in the 
1910 Proviso, nor in any Report relating thereto, is 
there a single statement justifying any inference 
that Congress intended to let down the bars with 
respect to the power or train-brake provisions of 
the Acts. 



10 

The Proviso of the 1910 Act is now contained in 
section 13 of Title 45 of the Code, and reads as fol- 
lows: 

Provided, That where any car shall have 
been properly equipped, as provided in this 
chapter, and such equipment shall have be- 
come defective or insecure while such car 
was being used by such carrier upon its line 
of railroad, such car may be hauled from the 
place where such equipment was first dis- 
covered to be defective or insecure to the 
nearst available point where such car can be 
repaired, without liability for the penalties 
imposed by this section or section 6 of this 
chapter, if such movement is necessary to 
make such repairs and such repairs cannot 
he made except at such repair point. (Our 
italics.) 

This proviso, narrow in its scope, covers but one 
situation — the necessary movement of a car for re- 
pairs. It is submitted that it has no application to 
the instant case. 

It should be kept in mind that the movement 
complained of in this case is that of a train ; it is 
not simply the hauling of a car with inoperative 
power or train brakes, for the train is the unit and 
not the car. Otherwise, several penalties might 
attach for the operation of a single train with a 
number of cars having cut-out brakes. 

It should be noted that nowhere in the Acts is the 
movement of a car, as such, with cut-out power 
brakes made unlawful; the unlawfulness consists 



11 

in the movement of a train having such a car 
associated together with other power-braked cars. 
Neither do the Acts require that any particular 
car be equipped with power brakes. All that the 
Acts do require is that whenever a train is oper- 
ated with power or train brakes a certain percent- 
age of the cars therein must have their power 
brakes operated, and all cars so equipped and asso- 
ciated together with the 85-percent power-braked 
cars must have their power brakes in use and oper- 
ation. 

It is not an unreasonable construction of the 1910 
Proviso to say that it applies only to those cars that 
have been properly equipped, '*as provided in this 
Act", etc., having in mind that the Act does not 
require such car to be equipped with power brakes. 
Had Congress intended that the movement of a 
train should be included in the privileges granted 
under the Proviso, it is but fair to assume that it 
would have said so, having in mind that it was very 
particular to mention cars when referring to the 
equipment or movement of cars, and to trains when 
dealing with the power brakes. It might very weU 
be said that Congress was so anxious that in the 
movement of trains the engineer should have the 
best possible control of the braking apparatus as to 
have excluded the movement of a train from the 
benefits of the Proviso. 

In Chesapeake <& Ohio By. Co. v. United States, 
249 Fed. 805, 808, in construing the 1910 Proviso 



12 

the Circuit Court of Appeals for the Sixth Circuit 
said : 

Although the amendment measurably grants 
relief to and enlarges the right of interstate 
railroads, it nevertheless is limited by its ex- 
press terms and manifest intent, and its fur- 
ther extension is unwarranted. 

The Supreme Court of the United States in New 
York Central R. v. United States, 265 U.S. 41, 
pointed out the manner in which cars with defective 
power brakes might be hauled without violating the 
law. In that case a train left its initial terminal 
with all power brakes in the train in use and opera- 
tion ; en route the power brakes on three of the cars 
became inoperative and were cut out ; and the train 
was thus operated through Erie, a repair point, to 
destination. The following certified question was 
considered by the Supreme Court : 

May an interstate carrier lawfully operate a 
car equipped with power brakes past an 
available repair station to destination when 
its power brakes, becoming out of order in 
transit, have been cut out of the power brake 
system of the train and when more than 
eighty-five per centum of the cars of the 
train are equipped with power brakes con- 
trolled by the engineer of the locomotive t 

In deciding the case the Supreme Court said, p. 
46; 

The unlawfulness of the operation re- 
sulted from the association in the air line of 



13 

cars having defective brakes with cars hav- 
ing brakes operated by the engineer. The 
cutting out of the defective brakes, leaving 
cars on the air line, did not terminate the 
association. 

After discussing the case and citing authorities, 
the Supreme Court answered the question pro- 
pounded to them as follows : 

No, unless placed in the train to the rear of 
all cars having their brakes operated by the 
engineer. 

Taking the New York Central opinion as a whole, 
the Supreme Court really held that where you have 
a train composed of cars, all equipped with power 
or train brakes, and all brakes in serviceable condi- 
tion, that all such brakes must be used and operated 
by the engineer ; but that any cars with brakes cut 
out because of defects must be switched to the rear. 
If they are not defective there is no justification for 
cutting them out. 

It seems quite conclusive under the interpreta- 
tion placed upon the Act by the Supreme Court in 
the New York Central case, that in hauling car No. 
93305 with its power brakes cut out in any other 
place in the train except to the rear of all other 
power-braked cars having their brakes operated by 
the engineer, the law was violated. No contention 
that the car was being hauled for purposes of re- 
pair under the 1910 Proviso should be allowed to 
becloud the issue. 



14 

The significant point of the Supreme Court's 
decision is this: that a car, for instance, with a 
defective running board or a defective coupler, can- 
not be hauled through a repair point, for it is 
clearly embraced within such Proviso; but in the 
case of a train, with a car having cut-out brakes, 
it may be operated through such repair point, 
simply by changing the location of such car in the 
train. 

In the New York Central case, the Supreme 
Court laid no stress on Erie being a repair point, 
for that fact would in no way be of any assistance 
in switching the three cut-out cars to the rear. In 
that case, the carrier, in the operation of such 
train to Buffalo, ignored the fact that Erie was a 
repair point ; ignored its ability to switch the three 
cars to the rear; and then the Supreme Court, 
without suggesting which was the better, safer 
course, simply said, in effect, to that carrier that it 
should have done one or the other. 

As heretofore noted, requirements of the Safety 
Appliance Acts have uniformly been held to be 
mandatory and absolute, and no better reason has 
been advanced for so holding than the statement by 
the Supreme Court that "the ability to use such 
brakes on the entire train must often mean the 
difference between safety and serious accident." 
L. c& J. Bridge Co. v. United States, 249 U.S. 534. 
If one car with cut-out brakes may be operated in 
association with other power-braked cars, what is 



15 

the limit to the number that may be hauled in a 
train? If the 1910 Proviso applies to the hauling 
of cars with cut-out brakes, there is no limit, and a 
carrier may move an entire train with the power 
brakes cut out on all the cars therein. 

The United States Circuit Court of Appeals for 
the Fourth Circuit, in Virginian Railway v. United 
States, 223 Fed. 748, in referring to the train- 
brake provision of the Act, said : ' ' On the contrary, 
we deem it beyond doubt that the duty imposed 
by the provision here considered is mandatory and 
absolute." So, in Great Northern Railway v. 
United States, 244 Fed. 406, considering also such 
train-brake provision, this Court said: "The doc- 
trine of the decision * * * is that the statute 
is mandatory * * *." 

Later, in New York Central R. Co. v. United 
States, supra, the Supreme Court cited with ap- 
proval the case of Pennsylvania Company v. United 
States, 6th C.C.A., 241 Fed. 824, 830, wherein it was 
said that "the train-brake provision, like the Safety 
Appliance Acts generally, is absolute and manda- 
tory. ' ' 

In the case of Galveston H. d S. A. Ry. v. United 
States, 199 Fed. 891, the Circuit Court of Appeals 
for the Fifth Circuit held that where the air pump 
on the locomotive failed to function and it was im- 
possible to supply air to the train line, the law 
was not violated when the train was operated some 
distance over the main line to a repair point when 



16 

the speed of the train was controlled by hand brakes 
exclusively. 

The trial court directed a verdict for the Gov- 
ernment and the judgment was affirmed by the ap- 
pellate court in per curiam opinion, holding that 
the law was absolute (183 Fed. 579). After citing 
many cases, the Court said: "On these adjudged 
cases, and in view of the construction given by 
Congress in the Act of April 14, 1910, the judg- 
ment of the District Court is affirmed." The date 
of the alleged violation was prior to the passage of 
the 1910 Act. 

On a rehearing the Court of Appeals reversed it- 
self, adhering to the proposition that the 1910 Act 
should be considered as a Congressional construc- 
tion of the former Acts. One judge dissented. 

It is impossible to reconcile that Court of Appeals 
construction of the Acts, or to harmonize it with 
their humane purposes. Controlling the speed of 
trains by means of hand-brakes is too dangerous a 
practice, not only to the crew handling same, but to 
all other travelers and employees who may be on 
that particular part of the railroad at the time, to 
be countenanced, and it is not believed that Con- 
gress ever intended the 1910 Proviso to permit such 
a condition. 

As in the lower court, appellee will no doubt 
continue to seek solace from the fact that in the 
New York Central case the Supreme Court refused 
to decide whether it was a violation to haul the train 



17 

into Erie ; as a matter of fact, there was no neces- 
sity to decide such question. The Government had 
brought suit for the movement of the train in the 
condition mentioned fr(ym Erie ; it could not have 
collected two penalties for the single movement of 
the same train, that is, one penalty for the move- 
ment into Erie, and another penalty for the out- 
bound movement, merely a continuation of the 
inbound movement. But perhaps the more impor- 
tant reason why such question was not answered is 
because the parties were interested in stipulating 
the facts with respect to the movement from Erie. 
For that reason the stipulation did not show all 
that it should or would have had the suit been for 
the movement into Erie; and therefore, the Su- 
preme Court could not intelligently have answered 
such question, having before it no knowledge as to 
whether there were sufficient unoccupied tracks 
and switches to permit the three cars to be switched 
to the rear between where their brakes were cut out 
and Erie ; so far as that Court knew, such switching 
might have been impossible. 

Expert testimony as to relative dangers not necessary 
in aiding trial court in arriving at proper construction 
of act 

In construing the associated car provisions of 
the Act the Supreme Court held, as heretofore 
stated, that cars with cut-out brakes may lawfully 
be hauled only to the rear of all operated power- 
braked cars in the train, and the use of expert 



18 

testimony to show that it would be safer to place 
these cars in some other part of the train is clearly 
inadmissible. In Louisville d; Jeffersonville 
Bridge Company, supra, the Supreme Court said, 
p. 539: 

But the construction which the act should 
receive is not to be found in balancing the 
dangers which would result from violating 
it, nor in considering what other precautions 
will equal, in the promotion of safety, those 
prescribed by the Act. Such considera- 
tions were for Congress when enacting the 
law * * *. 

It is. therefore apparent that any expert testi- 
mony offered by appellee in assisting the trial 
Court in construing the Act with respect to the 
relative safety of placing cut-out cars in different 
parts of the train is clearly inadmissible for the 
reason that this feature of the law has already been 
construed. 

CONCLUSION 

It is clear that the 1910 Proviso applies to the 
movement of cars only, and therefore cannot be 
invoked to justify the movement of the train in 
question from Paradise : 

First, the Proviso prohibits the movement of a 
car beyond a repair point ; it neither offers nor per- 
mits any alternative or substitute ; yet the Supreme 
Court, in the New York Central ca^se, in pointing 
out how cars with cut-out power or train brakes 



19 . 

may be hauled from repair points, in effect held 
that the Proviso does not apply to trains. 

Second, the Proviso has reference only to de- 
fective cars, for the movement of which anywhere 
in a train, a carrier is liable for the statutory pen- 
alty, unless permitted by such Proviso ; yet, in the 
case of a car with cut-out power or train brakes, the 
carrier is not liable at any time for its movement, 
or even for the movement of a train having 85 per- 
cent power brakes in operation, when such car is 
at the rear of the train. In the first instance, it 
is the defect that creates the penalty ; in the second, 
it is not the defect, but the location of the car in a 
train that renders a carrier liable. 

Third, both in the New York Central and instant 
cases, the movements complained of were not neces- 
sary in order to switch to the rear cars with cut-out 
power or train brakes, and such switching was all 
that was necessary for a full compliance with the 
statutory requirement. 

Fourth, in both the New York Central and in- 
stant cases, the movements complained of were 
from intermediate points; in the former case the 
defective power-braked cars could no doubt have 
been switched to the rear at Erie; in the instant 
case it was admitted that the defective car could 
have been switched to the rear at Paradise. In the 
New York Central case the carrier was held liable 
for the statutory penalty for not so switching them 



20 

to the rear; in the instant case there is no reason 
why appellee should not be held liable for similar 
neglect or failure at Paradise. 

Fifth, it has been repeatedly held that inconven- 
ience in complying with the law is no defense ; but 
the Supreme Court did not consider the greater in- 
convenience in switching three cars to the rear in 
the New York Central case; nor should this Court 
consider the lesser inconvenience in switching but 
one car to the rear at Paradise. 

Wherefore, it is respectfully submitted that the 
judgment should be reversed and the case remanded 
for a new trial, with instructions to enter judgment 
for the Government if the evidence on a new trial be 
substantially the same as herein stipulated. 

James H. Baldwin, 
United States Attorney. 
R. Lewis Brown, 
Assistant United States Attorney. 
M. C. List, 
Special Assistant to the 
United States Attorney. 
Attorneys for Appella/nt, 



■...£,i:r*hj!ii.-,J. «• «. •OVIRmMT PRINTINt OPriCIl l»»4 



NO. 7469 



tKniteli States 
Circuit Court of Appeals 

jfor tl)e j^intlj Circuit 



UNITED STATES OF AMERICA, -^^ 

Appellant, 

vs. 
NORTHERN PACIFIC RAILWAY COMPANY, 

Appellee. 



Brief for appellee 



GUNN, RASCH, HALL & GUNN, 
HOWARD TOOLE, 

Attorneys for Appellee. 



Filed p|.|-.-g-F5 1935. 



Clerk. 






CONTENTS 

Page 

Statement of Facts 1, 3 

Questions Involved 3, 4 

Argument 4, 16 

CASES CITED 

Carlisle Packing Co. v. Sandanger, 

259 U. S. 255 15 

Drexter v. Commercial Savings Bank, 

5 Fed. (2d) 13 14 

Erie R. Co. v. U. S., 240 Fed. 28 6, 10, 13 

Great Northern Ry. Co. v. Otos, 239 U. S. 350.. 8 
Galveston H. & S. A. Ry. Co. v. U. S., 

199 Fed. 891 8 

Louisville & Jefferson Bridge Co. v. U. S., 

249 U. S. 534 16 

N. Y. Cent. R. Co. v. U. S., 265 U. S. 41 11 

Pa. Co. V. U. S., 241 Fed. 824 13 

St. Louis I. M. & S. R. Co. v. State, 143 

S. W. 913 15 

U. S. V. Chesapeake & 0. Ry. Co., 213 Fed. 748 10 
U. S. V. Chi. St. P. & 0. Ry. Co., 42 Fed. 

(2d) 248 12 



NO. 7469 



Circuit Court of Appeals 

JFor tl)e i^intl) Circuit 



UNITED STATES OF AMERICA, 

Appellant, 
us. 
NORTHERN PACIFIC RAILWAY COMPANY, 

Appellee. 



3Srief for Sppeller 



This case involves a construction of Sections 
1, 6, and 9 of Title 45, U. S. C. A. as amended 
and supplemented by Section 13 of said Title. 

Ry agreement of the parties, in writing, it was 
heard and determined by the Court without a 
jury (Rec. p. 14). 

Although certain evidence was introduced at 
the trial, all the facts material to a determination 
are contained in the pleadings (Rec. pp. 7-11) 
and an agreed statement of fact (Rec. pp. 14-20). 

STATEMENT OF FACTS 

The uncontradicted facts, as appear from the 
pleadings and agreed statement of fact, are as 
follows : 



On August Srd and 4th, 1933, appellee operated 
a freight train, consisting of 74 cars and a loco- 
motive, from Spokane, Washington, through 
Paradise, Montana, to Missoula, Montana. (Rec. 
pp. 3, 7, 9, 16 and 17). 

All of the 74 cars were equipped ^Yith air brake 
apparatus and all were in use and operated by 
the engineer when the train left Spokane. (Rec. 
p. 9). 

At some place between Spokane and Paradise, 
the brakes on the 8th car from the locomotive 
ceased to operate properly and interf erred wilh 
the movement of the train and the cut-out cock 
on the cross over pipe of said car was closed so 
as to release the brakes but this closing did not 
interfere with the free passage of air through 
the main train pipes of the train, or with the con- 
trol by the engineer of the power or train brakes 
on any of the other 73 cars in the train (Rec. 
p. 9).' 

Appellee maintained a repair station for cars 
at Spokane and at Missoula, but none between 
these points. There was a train yard at Paradise, 
with switches and side tracks, but no facilities or 
men to repair air brakes. Paradise had been 
abandoned as a repair station in 1927. (Rec. pj). 
8, 9, 10, 11, 15 and 16). 

Appellee did not maintain or operate any 
switch engines at Paradise, although certain 
local freight trains had their terminals there and 



train crews were changed there. (Rec. pp. 8 
and 15). 

On the entire journey of the train from Spo- 
kane through Paradise to Missoula, all cars, in- 
cluding the 8th car from the locomotive, were 
"associated together," i. e., had their train air 
lines connected. (Rec. pp. 7, 11, 16 and 19). 

The car in question, to-wit, the 8th car from 
the locomotive, was taken out of the train at 
Missoula, where repairs were made to the air 
brake apparatus thereon by installing a new 
triple valve. (Rec. pp. 19 and 20). 

The hauling of said car from Paradise to Mis- 
soula was necessary in order to make the re- 
pairs since appellee maintained no repair sta- 
tion and/or workmen for repairing airbrakes on 
cars between Spokane and Missoula. (Rec. p. 
15). 

QUESTIONS INVOLVED 

The principal question in the case is raised by 
appellant's assignments of error I to III inclu- 
sive, (Rec. p. 56). This question is whether ap- 
pellee violated Sections 1, 6 and 9 of Title 45 U. 
S. C. A. as supplemented and amended by Sec- 
tion 13 of said title in operating a train through 
Paradise, to Missoula, with an air brake equipped 
car not having its brakes used and operated by 
the engineer associated with 85 per cent of the 
cars of said train having their air brakes in use 
and operated by tlie engineer. 



A minor question in this case is raised by ap- 
pellant's assignments of error IV to X, inclusive 
(Rec. pp. 56-59), as to the admissibility of cer- 
tain evidence. We deem this question im- 
material for the reason that even if this evidence 
was inadmissable, it constituted harmless error. 

Appellant's assignments of error XI to XIV 
(Rec. pp. 60-61) have been abandoned (Appel- 
lant's Brief, p. 6). 

ARGUMENT 

Appellee's contention is that the only prohibi- 
tion imposed by the statute was that it should 
not haul the car in question beyond Missoula, 
Montana, "the nearest available point" where 
such car could be repaired. 

Appellant contends that appellee violated the 
statute by not switching the car to the rear of the 
train at Paradise, where there were side tracks 
available. 

Much has been said by appellant about switch- 
ing the car to the rear of the train. In order to 
eliminate any misunderstanding or confusion in 
the minds of the Court, wc call attention to the 
fact that nowhere in the statute is there any 
reference to switching a car or cars to the rear 
of a train. 

Section 1 of Title 45 U. S. C. A. was enacted in 

1893, and reads as follows: 

"It shall be unlawful for any common 
carrier engaged in inlcrsialc commerce by 



railroad to use on its line any locomotive 
engine in moving interstate traffic not 
equipped with a power driving-wheel brake 
and appliances for operating the train brake 
system, or to run any train in such traffic 
that has not a sufficient number of cars in 
it so equipped with power or train brakes 
that the engineer on the locomotive drawing 
such train can control its speed without re- 
quiring brakemen to use the common hand 
brake for that purpose. (March 2, 1893, c. 
196, sec. 1, 27 Stat. 531)." 

Section 9 Title 45 U. S. C. A. was enacted in 

1903 and reads as follows: 

"Whenever, as provided in this chapter, 
any train is operated with power or train 
brakes not less than 50 per centum of the 
cars in such train shall have their brakes 
used and operated by the engineer of the 
locomotive drawing such train; and all 
power-braked cars in such train w^hich are 
associated together with said 50 per centum 
shall have their brakes so used and operated; 
and, to more fully carry into effect the ob- 
jects of said chapter, the Interstate Com- 
merce Commission may, from time to time, 
after full hearing, increase the minimum 
percentage of cars in any train required to 
be operated with power or train brakes 
which must have their brakes used and oper- 
ated as aforesaid; and failure to comply with 
any such requirement of the said Interstate 
Commerce Commission shall be subject to 
the like penalty as failure to comply with 
anv requirement of this section. (March 2, 
1903, c. 976, sec. 2, 32 Stat. 943)." 
Pursuant to authority conferred upon it by the 

Act of 1903, the Interstate Commerce Commis- 



sion, on June 6, 1910, ordered the minimum pre- 
scribed by the Act to be increased to 85 per cent. 

Section 6, Title 45 U. S. C. A., \Yhich was en- 
acted in 1893, as Section 6, 27 Stat. 532, simply 
provides the penalty for violation of the Act. 

From the time of the original enactment and 
up until 1910, there was considerable difference 
of opinion among the Courts in making applica- 
tion of the various sections of the Safety Appli- 
ance Act. This was pointed out by Circuit Judge 
Denison of the Sixth Circuit, in the case of Erie 
R. Co. V. United States, 240 Fed. 28, at pp. 30-31, 
where he said: 

"Prior to 1910, the prohibition in the 
Safety Appliance Act against hauling cars 
v,iiich would not couple automatically by im- 
}>act seemed to be absolute and uncondi- 
tional. It was obvious that cars would be- 
come defective in this {articular, or be dis- 
covered to be so defective, either while they 
v>ere in transit between stations or while 
tliey were upon a side track or in a yard 
where it was impossible to make repairs. If 
this occurred in transit where there was no 
side track, the defective car could not be set 
out from the train, unless it happened to be 
the last car, aud, if it was, it could not be 
left there without blocking tlie track, aud it 
could not be liauled even to the nearest side 
track without violating the letter of the ori- 
ginal law; so, if the defect was discovered 
while the car was in transit, but was of a 
character that could be repaiied only at some 
other place, hauling the car to the nearest 
place where it couhl be repaired violated 



this same letter of the law. These practical 
difficulties led some courts to construe the 
statute as intended to permit a hauling which 
was necessary for the purpose of making 
the necessary repairs; but this court, follow- 
ing what seemed to be the rules of construc- 
iton applied by the Supreme Court to other 
parts of this same statute, held that its letter 
must be observed, and that even such a 
necessary movement was forbidden, if made 
in connection with other cars commercially 
used. Southern Ry. Co. v. Snyder, 187 Fed. 
492, 497, 109 C. C. A. 344." (Italics ours.) 

As was said in the same case, at page 32: 

"In this situation, Congress passed the 
amendment of 1910, containing the proviso 
in Section 4. This is a clear legislative 
recognition that the strictness of the statute 
ought to be relaxed in this particular;" 

Section 4 of this Act of 1910 became Section 13, 
Title 45 U. S. C. A., and the proviso therein which 
appellee contends is controlling in this case, reads 
as follows: 

"Provided, that where any car shall have 
])een proper!}^ equipped, as provided in this 
Chapter, and such equipment shall have be- 
come defective or insecure while such car 
was being used by such carrier upon its 
line of railroad, such car may be hauled 
from the place where such equipment was 
first discovered to be defective or insecure, 
to the nearest available point where such 
car can be repaired without liability for the 
})enalties imposed by this section or Section 
f) of this Chapter, if such movement is 
necessary to make such repairs and such re- 



8 

pairs can not be made except at such repair 
point;" 

The title to the Act of 1910 was as follows: 

"Chapter 160. An act to supplement 'An 
act to promote the safety of employes and 
travelers upon railroads by compelling com- 
mon carriers engaged in interstate com- 
merce to equip their cars with automatic 
couplers and continuous brakes, and their 
locomotives with driving wheel brakes, and 
for other purposes,' and other safety appli- 
ances acts, and for other purposes." (Italics 
ours). 

Mr. Justice Holmes in the case of Great North- 
ern Ry. Co. V. Otos, 239 U. S. 350 at p. 351, rec- 
ognizes Section 13 as supplementary in the fol- 
lowing language: 

"The supplementary act of April 14, 1910, 
chap. 160, Sec. 4, 36 '^Stat. at L. 299, Comp. 
Stat. 1913, setcion 8621, relieves the carrier 
from the statutory penalties white the car is 
being hauled to the nearest available point 
where it can be repaired," (Italics ours). 

In a case involving air brake equipment: Gal- 
veston H. & S. A. Ry. Co., v. United States, 199 
Fed. 891, (5th Circuit), cited by appellant at 
page 15 of its brief, Circuit Judge Pardee, at 
page 896, says, of the proviso: 

"By incorporating the provision just 
(fuoted, and declaring the same as a suj)pk^- 
ment to the Act of 1893, we may safely infer 
that it was intended by Congress to give 
tlie proper construction to the Act of 1893." 

And District Judge Crubb, in a concurring 
oj)inion on the same case, said: 



9 

"While the language of Section 2 of the Act 
of March 2, 1903, might permit of a construc- 
tion that would impose an absolute duty on 
the carrier, and absolute liability for the pen- 
alty provided for operating its train when not 
equipped as required, and while some courts 
have so construed it, I agree with the major- 
ity opinion that this would not be a reason- 
able interpretation of the original statute, 
and that the amendatory act of April 14, 
1910, was intended to be declaratory only of 
the Court's interpretation to meet the de- 
cisions mentioned." 

It follows then that the proviso of Section 13 
is a legislative construction recognizing the ex- 
ception which some of the courts had held must 
be implied in the original Act, and that, there- 
fore, appellee was guilty of no violation in haul- 
ing the car in question from Paradise to Mis- 
soula, "the nearest available repair point," while 
it was "associated together" with other cars hav- 
ing their air brakes used and operated by the 
engineer. 

District Judge Bourquin, who tried the case 
in the lower court, in substance said, first, that 
there is nothing in the statute to support appel- 
lant's contention that the car in question should 
have been switched to the rear of the train. He 
points out that the statute deals only with cars 
"associated together." 

He further calls attention to the fact that some 
useful purpose must have inspired Section 13 
and that the onlv reasonable inference is that 



10 

the purpose was to relieve from what Section 9 

forbids, to-wit: The hauling of a defective car in 

association with other like air brake cars (Rec. 

p. 51). 

As indicative of the court's recognition of the 

purpose of the amendment, Circuit Judge Deni- 

son of the Fifth Circuit, in the case of Erie R. 

Co. V. U. S., 240 Fed. 28, at page 33, says: 

"The construction which we adopt is, in 
our judgment, required by a broad view of 
the purpose and intent of the proviso. The 
general prohibition of the act had been most 
strictly construed. The amendment per- 
mitting hauling to a repair point tended to 
enlarge, and not to restrict, the rights of the 
carrier. The "remedy" given by the amend- 
ment was to permit hauling to a repair point, 
and this amendment sliould be construed 
"to advance the remedy." Since it was often 
necessary that a defective car should be 
hauled in a revenue train from the point 
where the defect was discovered to some 
place where the car could at least be set out 
of the train, and since this necessity un- 
doubtedly was one of the moving causes for 
the amendment of 1910, we see little room 
for doubt that the amendment was intended 
to permit such hauling in revenue trains as 
far as might be necessary to escape that 
strictness in the law which the amendment 
implied was unreasonable." 

And Circuit Judge Pritchard in the case of U. S. 

V. Chesapeake and 0. Ry. Co., 213 Fed. 748, 

(Fourth Circuit), at page 751, says: 

"The fact that the statute provides that 
"such car may be hauled from the place 



11 

wliere such equipment was first discovered 
to be defective or insecure to the nearest 
available point where such car can be re- 
paired" clearly shows that it was the pur- 
pose of Congress not to permit unnecessary 
delay in making repairs of defective equip- 
ment by keeping such cars on side tracks 
and moving them from place to place un- 
less it should be for the purpose of hauling 
them to the nearest available point for the 
purpose of making needed repairs." (Italics 
ours.) 

Appellant devotes a considerable portion of its 
brief to the discussion of the New York Central 
Railroad Company v. United States, 265 U. S. 41. 
In reading appellant's brief it would seem that in 
support of its contention that the car with the de- 
fective brake should have been switched to the 
rear of the train it relies largely upon inferences 
drawn from the opinion in the New York Central 
case. It is there held that there was a violation of 
the law because the defective car involved in that 
case was not disassociated at the first available 
repair point. As a matter of fact, the question 
involved in our case was expressly reserved in 
the New York Central case. Mr. Justice Butler, 
at page 47 of that opinion, said: 

"The question whether it was a violation 
of the law to haul defective cars to Erie, the 
place of the first repair station, while asso- 
ciated in the train with the prescribed min- 
imu is not involved in this case and we ex- 
press no opinion upon it." 

As heretofore pointed out, the statute makes 



12 

no reference to switching a car to the rear of a 
train. 

If appellant's contention is correct, then, if 
it had been the eighth car from the rear of ap- 
pellee's train which had its brakes cut out, ap- 
pellee could have avoided a violation of the Act 
by simpl}^ disconnecting the air line at the front 
end of this 8th car from the rear, which would 
have ''disassociated" it from the 66 cars ahead 
of it having their brakes operated by the en- 
gineer. These 66 cars would still have consti- 
tuted 88 per cent of the cars in the train. Such 
a construction would invite a practice which 
would defeat the very purpose of the Act, in so 
far as it contemplates the use of the brakes on all 
available power braked cars in a train. Of this 
situation, U. S. District Judge Luse of Wiscon- 
sin, in the case of United States v. Chicago, St. 
P. & 0. Ry. Co., 42 Fed. (2d) 248, at p. 250, said: 

"I think it very doubtful whether it was 
intended to approve as lawful the hauling of 
power-braked cars, Ihe brakes of wliich are 
operable, to the rear of the 85 per cent, with- 
out their brakes being connected up and 
operated from Ihe locomotive, unless dis- 
associated from the cars having their brakes 
operated from the locomotive, as, for in- 
stance, by the interposition of a hand- 
braked car." 

DOES THE PROVISO CONTAINED IN SECTION 
13 APPLY TO A TRAIN? 

Appellant argues that Section 13 can only be 



13 

construed to apply to a car as distinguished from 
a train. Careful consideration of the Safety 
Appliance Act discloses the absurdity of such a 
construction. However, the Courts have dis- 
posed of this matter. In Erie R. Co. v. United 
States, 240 Fed. 28, at p. 35, the court says: 

"It is said that, because the permission of 
the proviso of section 4 extends only to "any 
car," it should not be thought of as reaching 
a train or an association of cars, or, in other 
words, that general permission to haul a 
car does not extend to hauling it in a train 
or in an}^ way except alone. This construc- 
tion is fatal to the whole purpose of the act, 
because the original prohibition of section 2 
and the pen allies of section 4 are not direct- 
ed against hauling trains having defective 
cars, but are against hauling "any car." Con- 
sequently, if a car alone and a car in a train 
are essentially different things, and if the 
language "any car" reaches the former and 
not the latter, sections 2 and 4, the main sec- 
tions of the act, do not reach trains includ- 
ing defective cars, but only such a car as a 
separate unit; and, of course, this construc- 
tion is not right." 

And in Pennsylvania Co. v. United States, 241 

Fed. 824, at p. 829, it is said: 

"As to the air brakes: We agree with the 
learned District Judge who presided below 
that the train-brake provision applies to the 
movement in cfuestion. It applies to 'all 
trains' and to all cars 'used on any railroad 
engaged in interstate commerce.' Sections 1 
and 2, Act, March 2nd, 1903, 32 Stat. 943." 

Before concluding argument on this question, 



14 

allow appellee to say that it concedes that the 
provisions of the Safet}^ Appliance Act are man- 
datory but contends that it was here within the 
exception contained in the proviso of Section 13. 

THE COURT'S ADMISSION OF EVIDENCE REFERRED 

TO IN APPELLANT'S ASSIGNMENTS 

OF ERROR IV TO X. 

All of the exceptions included in the above 
assignments of error (Rec. pp. 56-59) refer to 
the testimony of appellee's witness Purcell (Rec. 
pp. 23-40). 

Ry written agreement of parties (Rec. p. 14) 

the case was tried by the Court without a jury, 

bringing it squarely within the familiar rule 

which is well stated by the Circuit Court of the 

8th Circuit in the case of Drexter v. Commercial 

Savings Rank, 5 Fed. (2d) 13, at p. 17, as follows: 

"Resides, this case was on the equity side, 
and tlie law is settled that in such a case, as 
also ordinarily in any case tried by tlie 
court witliout a jury, the admission of irre- 
levant, incompetent, and immaterial evi- 
dence is not reversible error, where tliere is 
in the case enough competent evidence to 
sustain the judgment rendered. Bodkin v. 
Edwards (C.C. A.) 265 F. 621;" 

The Rodkin case was decided by this Court. 

Again, the record discloses that the trial Court, 
referring to this testimony, said: "If it is not 
competent, the court will disregard it" (Wcc. p. 
24), and the opinion of the Court, which is a part 
of the record, (Rec. pp. 49-51, discloses that the 



15 

decision was based solely on a construction of 
the language of the statute. The United States 
Supreme Court stated the rule applicable in the 
case of Carlisle Packing Company v. Sandanger, 
259 U. S. 255, at p. 259, as follows: 

"But mere error, without more, is not 
enough to upset the judgment, if the record 
discloses that no injury could have resulted 
therefrom." 

Furthermore, we submit that to be entitled to 
a reversal on this ground, appellant must do 
more than simply point out technical error, and 
must show that the error was of such a nature 
that prejudice might reasonably have resulted 
therefrom (Dimmitt v. Breakey, 267 Fed. 792 
(C. C. A. 8th Ct.) It has not done so here. 

Appellant, however, insists that such evidence 
vvas admissible for the purpose of advising the 
Court as to the meaning of the various terms 
used, and assisting it in arriving at a reasonable 
construction of the statute. In construing a 
statute, a Court may seek every source for in- 
formation. The rule is aptly stated in St. Louis 
I. M. & S. R. Co. V. State, (Ark.) 143 S. W. 913, at 
p. 914, as follows: 

"For the purpose of considering and ad- 
vising itself as to the true interpretation of 
this term, the court ma^^ call to its assist- 
ance persons who may have information re- 
lative tliereto, or may apply to any other 
available source to obtain this information. 
But the testimony of any person called to 



16 

its aid is simply for the purpose of advising 
the court, and not to give evidence before 
the jury. Such testimony or information is 
solely for the court in aiding it in declaring 
what the term means, and thus to announce 
what the law is." 

In considering the case of Louisville & Jeffer- 
son Bridge Co. v. United States, 249 U. S. 534, 
cited in appellant's brief (p. 18), it should be 
borne in mind that the testimony to which ob- 
jection was interposed in the instant case was 
not offered for the purpose of excusing a viola- 
tion of the law, but solely for the purpose of 
assisting the Court in arriving at a correct con- 
struction of Section 13. In other words, to assist 
the Court in determining whether the construction 
of Section 13, contended for by appellee, is in 
accord with the general purpose of the Safety 
Appliance Act, to-wit, the promotion of safety. 

Respectfully submitted, 

GUNN, RASCH, HALL & GUNN, 
HOWARD TOOLE, 

Attorneys for Appetlee. 



No. 7470 

t^nttetr States; 

Circuit Court of Appeals; 

Jfor ti}t Minti) Circuit. 

/5 

LIZZIE H. GLIDE, 

Petitioner, 
vs. 

COMMISSIONER OF INTERNAL REVENUE, 

Respondent. 



Emmmpt af tlyr ^ttavh 



Upon Petition to Review an Order of the United States 
Board of Tax Appeals. 

FILED 

JUN 1^1934 

PAUL P. bhiEN, 

PARKER PRINTINO COMPANY. 845 SANSOME STREET, SAN FRANCISCO 



No. 7470 



Winittii Matti 

Circuit Court of Appeals! 



Jfor tJje iBtintf) Circuit. 



LIZZIE H. GLIDE, 

Petitioner, 
vs. 

COMMISSIONER OF INTERNAL REVENUE, 

Respondent. 



©ranarript at tij? UrrorJj 



Upon Petition to Review an Order of the United States 
Board of Tax Appeals. 



PARKER PRINTING COMPANY. 945 SANSOME STREET, SAN FRANCISCO 



INDEX 

[Clerk's Note: When deemed likely to be of an important nature, 
errors or doubtful matters appearing in the original certified record are 
printed literally in italic; and, likewise, canceUed matter appearing in 
the original certified record is printed and cancelled herein accordingly. 
When possible, an omission from the text is indicated by printing in 
italic the two words between which the omission seems to occur.] 

Page 
Answer to Amended Petition No. 47630 17 

•«* 
Answer to Amended Petition No. 52685 29 

Appearances No. 47630 1 

Appearances No. 52685 4 

Certificate of Clerk 82 

Decision 75 

Docket Entries No. 47630 1 

Docket Entries No. 52685 4 

Motion for Leave to Amend and Amended 

Petition No. 47630 7 

Amended Petition No. 47630 8 

Motion for Leave to Amend and Second 

Amended Petition No. 52685 18 

Second Amended Petition No. 52685 19 

Exhibit "A"— Attached to Second Amend- 
ed Petition — Letter Dated Dec. 12, 
1930, David Burnet, Commissioner, to 
Lizzie H. Glide 24 



ii Index 

Page 

Motion for Leave to Reopen and Introduce 

Further Testimony 47 

Exhibit A— Report on the Mt. Poso Oil 

Field 51 

Photostat Map of Mt. Poso Oil Field 64 

Motion to Consolidate 31 

Opinion 65 

Order re Exhibits 83 

Petition for Review and Notice of Filing 76 

Notice of Filing 79 

Praecipe 80 

Stipulation of Facts and Exhibits 2, 5, 8 and 10 32 

Exhibit No. 2 — Assigmnent of Lease No. 1... 40 

Exhibit No. 5 — Escrow Instructions 42 

Exhibit No. 8 — Letter dated June 23, 1926, 
Lizzie H. Glide to Kern County Ab- 
stract Company 43 

Exhibit No. 10— Letter dated July 10, 1926, 
Lizzie H. Glide to Title Guarantee and 

Trust Company 45 



APPEARANCES : 

For Petitioner: 

ADOLPHUS E. GRAUPNER, Esq., 

(Withdrawn) 
F. E. YOUNGMAN, Esq. 

For Respondent : 

H. A. COX, Esq. 



Docket No. 47630 

LIZZIE H. GLIDE, 

Petitioner, 
vs. 

COMMISSIONER OF INTERNAL REVENUE, 

Respondent. 

DOCKET ENTRIES: 

Transferred to Mr. Goodrich. 
1930 
Feb. 24 — Petition received and filed. Taxpayer no- 
tified. (Fee paid) 
Feb. 25 — Copy of petition served on General 

Counsel. 
Apr. 5 — Answer filed by General Counsel. 
Apr. 8 — Copy of answer served on taxpayer — cir- 
cuit calendar. 
Apr. 19 — Notice of withdrawal of A. E. Graupner, 
counsel for taxpayer, filed. 
1932 
Jan. 13 — Motion to restore to General Calendar filed 

by taxpayer. 1/15/32 granted. 
Feb. 4— Hearing set April 20, 1932. 



2 Lizzie H. Glide vs. 

1932 

Mar. 30 — Motion to consolidate with 52685 filed by 
taxpayer. 

Mar. 30 — Motion for leave to file an amended peti- 
tion filed by taxpayer — amendment ten- 
dered. 3/31/32 granted. 

Apr. 5 — Copy of granted motion and amended peti- 
tion served on General Oonnsel. 

Apr. 9 — ^lotion to consolidate granted. 

Apr. 19 — Answer to amended petition filed by Gen- 
eral Counsel. 

Apr. 20 — Hearing had before Mr. Van Fossan on 
merits. Submitted on record. Stipulation 
of facts (1) filed. Briefs due in 30 days. 

May 20 — Brief filed by General Counsel. 

May 20 — Brief filed b}^ taxpayer. 

June 10 — Transcript of hearing of April 20, 1932 
filed. 

June 15 — Motion for leave to file brief as amicus 
curiae filed by H. Hendricks. 

June 20 — Motion for leave to file brief as amicus 
curiae gTanted. 
1933 

Apr. 3 — Motion for leave to reopen and introduce 
further evidence filed by taxpayer. 5/19/33 
denied. 

Apr. 26 — Opinion rendered — Edgar J. Goodrich, 
Division 11. Judgment will be entered 
under Rule 50. 

Sept. 12 — Notice of settlement tiled by (Jenenil 
Counsel. 



Comm. of Internal Revenue 3 

1933 
Sept. 14— Hearing set Oct. 4, 1933 on settlement. [1*] 
Oct. 3 — Motion for continuance filed by taxpayer. 

10/4/33 denied. 
Oct. 4 — Hearing had before Mr. Goodricli, Divi- 
sion 11 on settlement, Rule 50. Petitioner's 

motion to continue denied. 
Oct. 12 — Transcript of hearing of Oct. 4, 1933 filed. 
Oct. 26 — Decision entered — Edgar J. Goodrich, 

Division 11. 
1934 
Jan. 24 — Petition for review by U. S. Circuit Court 

of Appeals (9) with assignments of error 

filed by taxpayer. 
Jan. 24 — Proof of service filed by taxpayer. 
Mar. 21 — Motion for extension to 5/1/34 to complete 

record filed by taxpayer. 
Mar. 21 — Order enlarging time to May 1, 1934 for 

preparation of evidence and delivery of 

record entered. 
Mar. 31 — Order from U. S. Circuit Court of Appeals 

(9) re exhibits filed. 
Apr. 3 — Praecipe filed — proof of service thereon. 

[2] 



*Page numbering appearing at the foot of page of original certified 
Transcript of Kecord. 



4 Lizzie H. Glide vs. 

APPEARANCES: 

For Petitioner: 

P. E. YOUNGMAN, Esq. 

For Respondent : 

P. B. SCHLOSSER, Esq., 
H. A. COX, Esq., 



Docket No. 52685 

LIZZIE H. GLIDE, 

Petitioner, 

vs. 

COMMISSIONER OF INTERNAL REVENUE, 

Respondent. 

DOCKET ENTRIES : 
Transferred to Mr. Goodrich 3/11/33. 
1931 

Feb. 10 — Petition received and filed. Taxpayer no- 
tified. (Fee paid) 

Feb. 10 — Copy of petition served on General 
Counsel. 

Feb. 28 — Motion to dismiss tiled by General 
Counsel. 

Mar. 3 — Hearing set March 25, 1931 on motion. 

Mar. 17 — Amended petition filed by taxpayer. 
3/19/31 copy served on General Counsel. 

Mar. 25 — Hearing had ])efore Messrs. Arundell and 
Goodrich on motion to dismiss. Amended 
petition filed — 60 days to answer. 



Comm. of Internal Revenue 5 

1931 

Mar. 25 — Order tliat motion to dismiss be denied and 
respondent be given the usual time to an- 
swer the amended petition entered. 

May 1 — Answer to amended petition tiled by Gen- 
eral Counsel. 

May 9 — Copy of answer served on taxpayer — Cir- 
cuit Calendar. 
1932 

Jan. 13 — Motion to restore to General Calendar filed 
by taxpayer. 1/15/32 granted. 

Mar. 30— Motion to consolidate with docket 47630 
for hearing and decision filed by taxpayer. 

Mar. 30 — Motion for leave to file amended petition 
filed by taxpayer — amended petition ten- 
dered. 

Apr. 9 — Motion for leave to file amended petition 
granted. 

Apr. 9 — Motion to consolidate granted. 

Apr. 19 — Answer to amended petition filed by Gen- 
eral Counsel. 4/28/32 copy served. 

Apr. 20 — Hearing had before Van Fossan on merits. 
Submitted on record. Stipulation of facts 
(1) filed. Briefs due in 30 days. 

May 20 — Brief filed by General Counsel. 

May 20 — Brief filed by taxpayer. 

June 10 — Transcript of hearing 4/20/32 filed. 

June 15 — Motion for leave to file brief as amicus 
curiae filed by H. Hendricks. 

June 20 — Motion for leave to file brief as amicus 
curiae granted. 



6 Lizzie H. Glide vs. 

1933 

Apr. 3 — Motion for leave to reopen and introduce 
further testimony tiled by taxpayer. 

Apr. 26 — Opinion rendered — Edgar J. Goodrich, 
Division 11. Judgment will be entered un- 
der Rule 50. [3] 

May 19— Motion of April 3, 1933 denied. 

Sei)t. 12 — Notice of settlement tiled by General 
Counsel. 

Sept. 14 — Hearing set Oct. 4, 1933 on settlement. 

Oct. 3 — Motion for continuance tiled by taxpayer. 
10/4/33 denied. 

Oct. 4 — Hearing had before Mr. Goodrich on 
settlement under Rule 50. Petitioner's 
motion to continue denied. 

Oct. 26 — Decision entered — Edgar J. Goodrich, 
Division 11. 
1934 

Jan. 24 — Petition for review by U. S. Circuit Court 
of Appeals (9) with assignments of error 
tiled by taxpayer. 

Jan. 24 — Proof of service tiled by taxpayer. 

Mar. 21 — Motion for extension to 5/1/34 to complete 
record tiled by taxpayer. 

Mar. 21 — Order enlarging time to 5/1/34 for prepa- 
ration of evidence and delivery of record 
entered. 

Mar. 31 — Order from U. S. Circuit Court of Ap- 
peals (9) re exhibits filed. 

Apr. 3 — Praecipe filed — Proof of service thereon. 

[4] 



Comm. of Internal Revenne 7 

[Title of Court and Cause— No. 47630.] 

MOTION FOR LEAVE TO FILE AMENDED 

PETITION. 

The petition in the a1)ove-entitled proceeding- 
raises the question whether amounts paid to a 
lessor by various lessees as bonus or cash considera- 
tion for execution of certain oil and gas leases are 
subject to statutory depletion. The properties cov- 
ered by the respective leases were owned by the 
petitioner for more than two years prior to execu- 
tion of the leases in question. The original petition 
filed by the petitioner did not raise the question 
whether such bonus payments are subject to tax 
as capital net gain. In view of the present uncer- 
tainty of this question the petitioner has prepared, 
and is submitting herewith, an amended petition 
which, by appropriate allegation of error, raises 
the question whether the bonus payments received 
in 1926 are subject to tax as capital net gain. No 
additional facts not alleged in the original petition 
are alleged in this amended petition. Petitioner ac- 
cordingly 

MOVES that the attached amended petition in 
Docket No. 47630 [5] be received and filed. 
Respectfully submitted, 

F. E. YOUNGMAN, 

Counsel for Petitioner. 

c/o Brewster, Ivins & Phillips, 

Southern Building, 

Washington, D. C. 



8 Lizzie H. Glide vs. 

[Endorsed]: United States Board of Tax Ap- 
peals. Filed Mar. 30, 1932.] 

[Endorsed] : United States Board of Tax Ap- 
peals. Granted Mar. 31, 1932. Logan Morris, 
Member. [6] 



[Title of Court and Cause— No. 47630.] 
AMENDED PETITION. 

The petitioner says: 

First. The petitioner is an individual residing 
at 160 The Uplands, Berkeley, California. 

Second. The notice of deficiency, a true copy of 
which is attached hereto and marked Exhibit ''A", 
was mailed to petitioner on or after January 10, 
1930. 

Third. The taxes in controversy, as determined 
by respondent, are income taxes for the calendar 
}ear 1926 and for an amount in excess of the pro- 
posed deficiency of $34,045.12. 

Fourth. The determination of tax set forth in 
the said notice of deficiency is based upon the fol- 
lowing errors: 

1. Respondent erred in disallowing a deduction 
in the amount of $159,407.32 which petitioner 
claimed as the proper amount for depletion on 
(•(Mtain l)onus and advance royalty payments made 
to iicr for leases of oil lands and wells made by her 
(luring the taxable year 1926. [7] 

2. Respondent erred in ruling that petitioner 
was entitled to no allowance for depletion on the 



Comm. of Internal Revenue 9 

amount of $579,663.00 received b)^ her during the 
year 1926 as bonus or advance royalty payments 
on leases of oil lands and wells made by her in 
said year. 

3. In the alternative, respondent erred in failing 
to treat as capital gain, subject to tax at 121/2%? 
amounts received by petitioner upon the execution 
by her of oil and gas leases upon property owned 
by her for more than two years. 

4. Respondent erred in disallowing as a deduc- 
tion from gross income for 1926 the amount of 
$805.02 interest paid during the taxable year on 
bonds of West Sacramento Reclamation District 
Number 900. 

Fifth. The facts upon which the petitioner relies 
as a basis of this proceeding are as follows : 

1. Prior to March 1, 1913, the petitioner ac- 
quired, upon distribution of the estate of her hus- 
band, Joseph H. Glide, the fee title to certain tracts 
of land in the State of California, which included 
Sections 1 and 13 of Township 27 South, Range 27 
East, and Sections 7, 19, 21, 23, 27, 31, 32, 33 and 35 
of Township 27 South, Range 28 East, Mr. Dialilo 
Base & Meridian, which lands are located in what 
is generally known as the Mt. Poso Oil Field of 
( 'alif ornia. 

2. During the year 1926, petitioner leased cer- 
tain of the above described lands to various indi- 
viduals and corporations for the purpose of drilling 
oil and gas wells thereon and producing therefrom 
petroleum oils and natural gas. [8] 



10 Lizzie 11. Glide vs. 

o. The leases made as aforesaid, and the amounts 
]-('(('iv(>d l)y petitioner as advances thereon were as 
follows : 

(i\). To John K. Porter, representative of and 
assig-nor to the Shell Oil Company of California, 
N U' of Section 1, T. 27 S., R. 27 E, M. D. B. & M. 
aiKl'x y2 of Section 7, T. 27 S., R. 28 E., M. D. B. 
cV: M. ; $5,510. 

(])). To J. R. Dorsey and Allen B. Campbell, 
representatives of and assignors to the Gilmore Oil 
(^o., NW % of Section 27, T. 27 S., R. 28 E., M. D. 
B. & M. : $2,000. 

(c). To General Petroleum Corp., SW % of 
Section 27, N i/o of Section 33, NE 14 of Section 19 
and the SW 14 of Section 21, T. 27 S., R. 28 E., M. 
1). B. & M.; $148,000. 

(d). To California Petroleum Corp., NW y^ of 
Section 21, T. 27 S., R. 28 E., M. D. B. & M.; 
$30,000. 

(e). To R. M. Sands, representative of and as- 
sigiior to the Petroleum Securities Co., Section 13, 
T. 27 S., R. 27 E., W Vo of Section 19, S 1/0 and 
NW 1/; of Section 31, SW % of Section 32, Section 
35, Section 23, E 1/0 of Section 27, and the SE 14. of 
Section 21, all in T. 27 S., R. 28 E., M. D. B. & 
M.; $394,153. 

4. Tliat said leases provided for the payment of 
royalties to petitioner on the basis of oil and gas 
])iM(ln('(Hl therefrom by the lessees thereunder or 
tlicii' assignees and, also, petitioner was paid by and 
received from said lessees during the taxa))le year 
^^.)2() })()imses, or advanced royalties, in the total 



Comm. of Internal Revenue 11 

amount of $579,663.00 on said leases. 

5. During the year 1926 the petitioner paid 
interest on bonds of the West Sacramento Reclama- 
tion District Number 900 in the total amount of 
$805.02. [9] 

6. Taxpayer filed her individual income tax 
return for the taxable calendar year 1926, with the 
Collector of Internal Revenue at San Francisco, 
California, on or about June 15, 1927. 

7. In her aforesaid income tax return, petitioner 
reported the receipt of said amount of $579,663.00 
as a part of her gross income for said taxable year 
and claimed deduction for depletion in the amount 
of $159,407.32, at the rate of 271/2 per cent, of said 
amount of $579,663.00 under Section 204(c)(2) of 
the Revenue Act of 1926. 

8. Respondent has disallowed the said claim of 
petitioner for deduction of said amount of $159,- 
407.32, or any other amount, as a depletion allow- 
ance for said taxable j^ear 1926 and has added said 
$159,407.32 to her taxable income for said year. 

9. In her 1926 income tax return the petitioner 
deducted from gross income the sum of $805.02 
interest paid on bonds of the West Sacramento 
Reclamation District Number 900. 

10. In determining the petitioner's tax liability 
for 1926 the respondent disallowed as a deduction 
from income the above sum of $805.02 interest paid 
during the taxable year. 

WHEREFORE, the petitioner prays that this 
Board may hear the proceeding and either allow 
the petitioner a deduction of $159,407.32 for the 



12 Lizzie H. Glide vs. 

taxable year involved for depletion on the advance 
royalties received by her, or determine that such 
royalty payments are taxable as capital net gain; 
allow a further deduction of $805.02 for interest 
])aid during- the taxable year; determine that the 
petitioner has overpaid her tax for the year 1927, 
and determine the amount of [10] such overpay- 
ment ; and grant such further relief as may be meet. 

F. E. YOUNGMAN, 

Counsel for Petitioner, 
c/o Brewster, Ivins & Phillips, 
Southern Building, 
Washington, D. C. [11] 

Affidavit 

State of California, 

City and County of San Francisco — ss. 

Lizzie H. Glide, being duly sworn, says that she 
is the petitioner above named; that she has read the 
foregoing petition and is familiar with the state- 
ments contained therein, and that the facts stated 
therein are true, except as to those facts herein 
stated upon information and belief, and those facts 
she ])elieves to be true. 

LIZZIE H. GLIDE. 

Subscribed and swoi'u to before me this IStli day 
of :\rarch, 1932. 

[Seal] E. J. (^ASEY, 

Notary Public. 
Notary Pul^lic in and for the City and 
County of San Francisco, State of 
California. 

My Commission expires August 19th, 1935. [12] 



Comm. of Internal Revenue 1 ^ 

EXHIBIT "A" 
TREASURY DEPARTMENT 

Washington 

Commissioner of Internal Revenue 

IT:AR:B-5 

MMR-60D Jan. 10, 1930. 

Mrs. Lizzie H. Glide, 

160 The Uplands, 

Berkeley, California. 

Madam : 

In accordance with Section 274 of the Revenue 
Act of 1926, you are advised that the determina- 
tion of your tax liability for the years 1926 dis- 
closes a deficiency of $34,045.12, as shown in the 
statement attached. 

The section of the law above mentioned allows 
you to petition the United States Board of Tax 
Appeals within sixty days (not counting Sunday as 
the sixtieth day) from the date of the mailing of 
this letter for a redetermination of your tax 
liability. 

HOWEVER, IF YOU DO NOT DESIRE TO 
PETITION, you are requested to execute the en- 
closed Form 866 and forward both original and 
duplicate to the Commissioner of Internal Revenue, 
Washington, D. C, for the attention of IT:C:P-7. 
The signing of this agreement form will expedite 
the closing of your return by permitting an early 
assessment of any deficiencies and preventing the 
accumulation of interest charges, since the interest 
period terminates thirty days after filing the agree- 
ment form, or on the date assessment is made, 



14 Lizzie H. Glide vs. 

Nvhichever is earlier; WHEREAS IF NO AGREE- 
MENT IS FILED, interest will accvunulate to the 
date of assessment of the deficiencies. 

Respectfully, 

ROBT. H. LUCAS, 

Commissioner. 
By 

Deputy Commissioner. 
:\LVS-1 
Inclosures : 
Statement 
Form 866 
Form 882 [13] 



STATEMENT 
IT :AR :B-5 elaniiary 10, 1930 

MMR-60D 

In re : Mrs. Lizzie H. Glide 
160 The Uplands 
Berkeley, California. 
Tax Liahility 

Correct Tax Tax Previously 
Year Liability Assessed Deficiency 

1926 $109,522 $75,477.03 $34,045.12 

Reference is made to the report of the Internal 
Revenue Agent in Charge at San Francisco, Cali- 
fornia, and to your protest, submitted under date 
of September 19, 1928. 

Careful consideration has been accorded your pro- 
test in connection with information submitted at a 



Comm. of Internal Revemie 



13 



conference held in this office December 17, 1929. The 
adjustments recommended by the Agent have been 
approved by this office. 

Your contention that depletion should be allowed 
on leases covering properties on which no well ex- 
isted at the time bonuses were paid, has been denied 
in accordance with the decision by the Board of Tax 
Appeals in the case of the Murphy Oil Company. 
See Board of Tax Appeals 15, page 1195. 

Net income reported on return $337,243.59 

Add: 

1. Additional rents and royalties 160,212.34 





$497,455.93 


Deduct : 




2. Additional contributions allowable 


24,031.85 


Adjusted net income 


$473,424.08 


Less: 




Dividends $3,715.00 




Personal exemption 1,500.00 


5,215.00 


Income subject to normal tax 


$468,209.08 


Normal tax at 11/2% on $4,000.00 


60.00 


Normal tax at 3% on $4,000.00 


120.00 


Normal tax at 5% on $460,209.08 


23,010.45 


Surtax on $473,424.08 


86,344.82 


Total 


$109,535.27 



[14] 



16 Lizzie H. Glide vs. 

Mrs. Lizzie H. Glide Statement. 

Brought forward $109,535.27 
Less: 

Earned income credit 13.12 



Tax liability $109,522.15 

Tax assessed 75,477.03 



Deficiency $34,045.12 

Explanation of Changes 

1. Income from rents and royalties has been 
increased by $805.02 representing bond interest paid, 
West Sacramento Reclamation District $900 and de- 
pletion of $159,407.32, the disallowance of which 
has already been explained. 

2. The amount claimed as contributions has been 
increased in accordance with the provisions of Sec- 
tion 214(a) (10) of the Revenue Act of 1926. 

Payment should not be made until a bill is re- 
ceived from the Collector of Internal Revemie for 
your district, and remittance should then be made to 
him. 

You are advised that a copy of this conmiunica- 
tion has been transmitted to your attorney, Mr. J. S. 
Y. Ivins, 815 Fifteenth Street, Washing-ton, I). C, 
who has on file a duly recorded power of attorney. 

[Endorsed] : United States Board of Tax Ap- 
peals. Lodged Mar. 30, 1932. [15] 



Comm. of Internal Revenue 1 7 

[Title of Court and Cause— No. 47630.] 

ANSWER TO AMENDED PETITION. 

The Commissioner of Internal Revenue, ])y his 
attorney, C. M. Charest, General Counsel, Bureau of 
Internal Revenue, for answer to the amended peti- 
tion of the above-named taxpayer, admits and denies 
as follows : 

(1) Admits the allegations of paragraph "First" 
of the amended petition. 

(2) Admits the allegations of paragraph "Sec- 
ond" of the amended petition. 

(3) Admits that the taxes in controversy are 
income taxes for the calendar year 1926. 

(4) Denies that the respondent erred in the de- 
termination of the deficiency as alleged in subpara- 
graphs 1 to 4, inclusive, of paragraph "Fourth" of 
the amended petition. 

(5) Denies the allegations of fact contained in 
subparagraphs 1 to 10, inclusive, of paragrai^h 
"Fifth" of the amended petition. 

Denies generally and specifically each and every 
allegation of the amended petition not hereinbefore 
admitted, qualified or denied. 

WHEREFORE, it is prayed that the Board re- 
determine the amount of the deficiency involved in 
this proceeding to be equal to the amount deter- 
mined [16] by the Commissioner, plus any addi- 
tional amount w^hich may arise from any adjust- 
ment of allowable deductions for contributions un- 
der the agreement set out in paragraph 22 of the 
stipulation of facts to be filed in this case, or from 



18 Lizzie H. Glide vs. 

the correction of any error or errors that may have 
been committed by the Commissioner. Claim is 
hereby asserted for the increased deficiency, if any, 
resulting from such redetermination. 

(Signed) C. M. CHAREST, 

General Counsel, 
Bureau of Internal Revenue. 
Of Counsel: 

HENRY A. COX, 

Special Attorney, 
Bureau of Internal Revenue. 

[Endorsed]: United States Board of Tax Ap- 
peals. Received Apr. 19, 1932. 

[Endorsed] : United States Board of Tax Ap- 
peals. Filed Apr. 19, 1932. [17] 



[Title of Court and Cause— No. 52685.] 

MOTION FOR LEAVE TO FILE AMENDED 
PETITION. 

The petition in the above-entitled proceeding 
raises the question whether amounts paid to a lessor 
by various lessees as bonus or cash consideration for 
execution of certain oil and gas leases are su])ject 
to statutory depletion. The properties covered by 
the respective leases were owned l)y tlie petitioner 
for move than two years prior to execution of the 
leases in question. The original petition tiled by the 
petitioner did not raise the question whether such 
bonus payments are subject to tax as capital net 



Comm. of Internal JRevcnue 19 

gain. In view of the present uncertainty of this 
question the petitioner has prepared, and is submit- 
ting herewith, an amended petition which, by appro- 
priate allegation of error, raises the question 
whether the boiuis payments received in 1927 are 
subject to tax as capital net gain. No additional 
facts not alleged in the original petition are alleged 
in this amended petition. Petitioner accordingly [18] 
MOVES that the attached amended petition in 
Docket No. 52865 be received and filed. 
Respectfully submitted, 

P. E. YOUNGMAN 

Counsel for Petitioner 
c/o Brewster, Ivins & Phillips, 
Southern Building, 
Washington, D. C. [19] 



[Title of Court and Cause— No. 52685.] 

SECOND AMENDED PETITION. 

The petitioner says: 

First. The petitioner is an individual residing at 
160 The Uplands, Berkeley, California. 

Second. The notice of deficiency, a true copy of 
which is attached hereto and marked Exhibit "A", 
was mailed to petitioner on or after December 12, 
1930. 

Third. The taxes in controversy, as determined 
by respondent, are income taxes for the calendar 
year 1927 and for an amount in excess of the pro- 
posed deficiency of $8,843.50. 

Fourth. The determination of tax set forth in the 



20 Lizzie H. Glide vs. 

said notice of deficiency is based upon the following 
errors : 

1. Respondent erred in disallowing as a deduc- 
tion from gross income for 1927 the amount of 
$40,811.38 which petitioner claims as the proper 
deduction for depletion on certain bonus and ad- 
vance ro.yalty pa}Tnents made to her for leases of 
oil lands and wells made by her during or prior to 
the taxable year 1927. [20] 

2. Respondent erred in ruling that petitioner 
was entitled to no allowance for depletion on the 
amount of $148,405.00 received by her during the 
year 1927 as bonus or advance royalty payments on 
leases of oil lands and w^ells made by her during or 
prior to the taxable year 1927. 

3. In the alternative, respondent erred in failing 
to treat as capital gain, subject to tax at 121/2% > 
amounts received by petitioner upon the execution 
by her of oil and gas leases upon property owned by 
her for more than two years. 

4. Respondent erred in disallowing as a deduc- 
tion from gross income for 1927 the amount of 
$805.02 interest paid during the taxable year on 
bonds of West Sacramento Reclamation District 
Number 900. 

Fifth. The facts upon which the petitioner relies 
as a basis of this proceeding are as follows : 

1. Prior to March 1, 1913, the petitioner ac- 
(|nired, upon distribution of the estate of her hus- 
band, Joseph H. Glide, the fee title to certain tracts 
of land in the State of California, which included 
Sections 1 and 13 of Township 27 Soutli, Range 27 



Comm. of Internal Ke venue 21 

East, and Sections 7, 19, 21, 23, 27, 31, 32, 33 and 
35 of Township 27 South, Range 28 East, Mt. Diablo 
Base & Meridian, which lands are located in what is 
generally known as the Mt. Poso Oil Field of Cal- 
ifornia. 

2. During or prior to the year 1927 the petitioner 
leased certain of these lands to various individuals 
and corporations for the purpose of drilling oil and 
gas wells thereon and producing therefrom petrol- 
eum oils and natural gas. 

3. From these various lessees, and pursuant to 
the lease [21] agreements or modifications thereof, 
the petitioner received during the taxable year 1927 
advance royalties or bonuses as follows : 

(a). From the Shell Oil Company the peti- 
tioner received during the taxable year 1927 
the sum of $106,580.00 as advance royalties or 
bonuses. 

(b). From the General Petroleum Corpora- 
tion the petitioner received during the taxable 
year 1927 the sum of $5,500.00 as advance roy- 
alties or bonuses. 

(c). From the Gihnore Oil Company the 
petitioner received during the taxable year 1927 
the sum of $2,000.00 as advance royalties or 
bonuses. 

(d). From the Petroleum Securities Com- 
pany the petitioner received during the taxable 
year 1927 the sum of $29,065.00 as advance 
royalties or bonuses. 

(e). From the California Petroleum Com- 
pany the petitioner received during the taxable 



22 Lizzie H. Glide vs. 

year 1927 the sum of $3,360.00 as advance roy- 
alties or bonuses. 

(f). From the Superior Oil Company the 
petitioner received during the taxable year 1927 
the sum of $1,900.00 as advance royalties or 
bonuses. 

4. The above leases provided for the payment of 
royalties to petitioner on the basis of oil and gas 
produced therefrom by the lessees thereunder or 
their assignees. The petitioner was paid by and 
received from said lessees during the taxable year 
1927 bonuses, or advance royalties, in the total 
amount of $148,405.00 on said leases. [22] 

5. During the year 1927 the petitioner paid in- 
terest on bonds of the West Sacramento Eeclama- 
tion District Number 900 in the total amount of 
$805.02. 

6. The petitioner filed her individual income tax 
return for the taxable calendar year 1927 with the 
Collector of Internal Revenue at San Francisco, 
California, on or about March 15, 1928. 

7. In her 1927 income tax return the petitioner 
reported the receipt of $148,405.00 as a part of her 
gross income for the taxable year and claimed de- 
duction for depletion in the amount of $40,811.38 
pursuant to Section 204 (c) (2) of the Revenue Act 
of 1926. 

8. The respondent has disallowed the deduction 
of $40,811.38, or any other amount, as a depletion 
nllowance for the taxable vear 1927 and has added 



Comm. of Internal Revenue 23 

to her taxable income for the year the above sum 
of $40,811.38. 

9. In her 1927 income tax return the petitioner 
deducted from gross income the sum of $805.02 in- 
terest paid on bonds of the West Sacramento Recla- 
mation District Number 900. 

10. In determining the petitioner's tax liability 
for 1927 the respondent disallowed as a deduction 
from income the above sum of $805.02 interest paid 
during the taxable year. 

WHEREFORE, the petitioner prays that this 
Board may hear the proceeding and either allow the 
petitioner a deduction of $40,811.38 for the taxable 
year involved for depletion on the advance royalties 
received by her, or determine that such royalty pay- 
ments are taxable as capital net gain; allow a fur- 
ther deduction of $805.02 for interest [23] paid dur- 
ing the taxable year; determine that the petitioner 
has overpaid her tax for the year 1927, and deter- 
mine the amount of such overpayment; and grant 
such further relief as may be meet. 

F. E. YOUNGMAN 

Counsel for Petitioner 
c/o Brewster, Ivins & Phillips, 
Southern Building, 
Washington, D. C. [24] 



24 Lizzie H. Glide vs. 

Affidavit 

State of California 

City and Couuty of San Francisco — ss : 

Lizzie H. Glide, being duly sworn, says that she 
is petitioner named in the foregoing petition, that 
she has read the petition and is familiar with the 
facts alleged therein, and that the facts stated therein 
are true to the best of her knowledge, information 
and belief. 

LIZZIE H. GLIDE 

Subscribed and sworn to before me this IStli day 
of March, 1932. 

[Seal] E. J. CASEY 

Notary Public 
Notary Public in and for the City and County of 
San Francisco, State of California. My Com- 
mission expires August 19th, 1935. [25] 



EXHIBIT ''A" 

Dec. 12, 1930 
IT:AR:E-1 
MKR-60D 

Mrs. Lizzie H. Glide, 
160 The Uplands, 
Berkeley, California. 
Madam : 

You are advised that the determination of your 
tax lia})ility for the year(s) 1927 discloses n defi- 
ciency of $8,843.50, as shown in the statement at- 
tached. 



Comm. of Internal Revenue 25 

In accordance with section 274 of the Revenue 
Act of 1926, notice is hereby given of the deficiency 
mentioned. Within sixty days (not counting Sun- 
day as the sixtieth day) from the date of the mailing 
of this letter, you may petition the United States 
Board of Tax Appeals for a redetermination of your 
tax liability. 

HOWEVER, IF YOU DO NOT DESIRE TO 
PETITION, you are requested to execute the en- 
closed agreement form and forward it to the Com- 
missioner of Internal Revenue, Washington, D. C, 
for the attention of IT :C :P-7. The signing of this 
agreement will expedite the closing of your re- 
turn (s) by permitting an early assessment of any 
deficiency and preventing the accumulation of in- 
terest charges, since the interest period terminates 
thirty days after filing the enclosed agreement, or 
on the date assessment is made, whichever is earlier ; 
WHEREAS IF NO AGREEMENT IS FILED, 
interest will accumulate to the date of assessment 
of the deficiency. 

Respectfully, 
DAVID BURNET, 

Commissioner. 
By (signed) W. T. Sherwood, 

Deputy Commissioner. 
Enclosures : 
Statement 
Form 882 
Form 870 
AKT-4 [26] 



26 Lizzie H. Glide vs. 



STATEMENT 




IT:AR:E-1 




MKR-60D 




In re : Mrs. Lizzie H. Glide, 




160 The Uplands, 




Berkeley, California. 


Tax Liability 




Corrected Tax 




Tax Previously 


^ 


Year Liability Assessed 


Deficiency 


1927 $28,202.73 $19,359.23 


$8,843.50 


The report of the internal revenue 


agent in charge 


at San Francisco, California, has been reviewed and 


approved in this office. 




1927 




Net income reported on return 


$113,636.56 


Add: 




1. Reclamation bond interest 




disallowed 


805.02 


2. Depletion disallowed 


40,811.38 




$155,252.96 


Less: 




3. Increase in contribution 




deduction 


6,152.45 


Net income adjusted 


$149,100.51 


Less: 




Dividends $8,485.60 


Personal exemption 1,500.00 9,985.60 


Bnlnnco subioct to normal tax 


.41139.114.91 



Comm. of Internal Revenue 



27 



Mrs. Lizzie H. Ulide 
Normal tax at 11/2% on $4,000.00 
Normal tax at 3% ou $4,000.00 
Normal tax at 5% 011 $131,114.91 
Surtax oil $149,100.51 

Total 
Less: 

Earned income credit 

Adjusted tax liability 
Tax previously assessed 



Statement. 

$ 60.00 

120.00 

6,555.75 

21,480.10 

$28,215.65 

13.12 

28,202.73 
19,359.23 



Deficiency 



$ 8,843.50 



28 Lizzie H. Glide vs. 

Mrs. Lizzie H. Glide Statement. 

Explanation of Changes 

1. The deduction of $805.02 claimed for interest 
paid on reclamation bonds has been disallowed in 
accordance with article 133 of Regulations 69. 

2. Depletion claimed in the amount of $40,811.38 
has been disallowed. In accordance with Income 
Tax Ruling 2384, Cumulative Bulletin VI-2, page 
22, article 216(e) of Regulations 69 does not apply 
to leases covering properties on which no well is in 
existence. 

3. The above adjustments result in an increase in 
contributions allowable which is arrived at as fol- 
lows : 

Net income reported on return $113,636.56 

Add: 

Reclamation bond interest, disallowed 805.02 

Depletion disallowed 40,811.38 



$155,252.95 



Add: 

Contribution deduction (return) 20,159.40 

Adjusted net income exclusive of 

contribution deduction $175,412.35 

[28] 
15% of 

$175,412.35 — $26,311.85 Contribution allowable 
20,159.40 Contribution claimed 



$ 6,152.45 Decrease in income 



Comm. of Internal Revenue 29 

A copy of this coinmunication lias been forwarded 
to your representative Brewster and Ivins, 815 - 15tli 
Street, N. W., Washington, D. C, in accordance with 
the authority conferred in the power of attorney 
executed by you and on file with the Bureau. 

[Endorsed] : United States Board of Tax Appeals. 
Filed Mar. 30, 1932. 

[Endorsed] : United States Board of Tax Appeals. 
Granted Apr. 9, 1932. Logan Morris, Mem])er. [29] 



[Title of Court and Cause— No. 52635.] 

ANSWER TO AMENDED PETITION. 

The Commissioner of Internal Revenue, by his 
attorney, C. M. Charest, General Counsel, Bureau 
of Internal Revenue, for answer to the amended 
petition of the above-named taxpayer, admits and 
denies as follows: 

( 1 ) Admits the allegations of paragraph ' ' First ' ' 
of the amended petition. 

(2) Admits the allegations of paragraph *' Sec- 
ond ' ' of the amended petition. 

(3) Admits that the taxes in controversy are 
income taxes for the calendar year 1927. 

(4) Denies that the respondent erred in the 
determination of the deficiency as alleged in sub- 
paragraphs 1 to 4, inclusive, of paragraph ''Fourth" 
of the amended petition. 



30 Lizzie H. Glide vs, 

(5) Denies the allegations of fact coiitaiued in 
subparagraphs 1 to 10, inclusive, of paragraph 
' ' Fifth ' ' of the amended petition. 

Denies generally and specifically each and every 
allegation of the amended petition not hereinbefore 
admitted, qualified or denied. 

WHEREFORE, it is prayed that the Board re- 
determine the amount of the deficiency involved in 
this proceeding to be equal to the amount determined 
[30] by the Commissioner, plus any additional 
amount which may arise from any adjustment of 
alloAvable deductions for contributions imder the 
agreement set out in paragraph 22 of the stipula- 
tion of facts to be filed in this case, or from the 
correction of any error or errors that may have been 
committed hy the Commissioner. (Uaim is hereby as- 
serted for the increased deficiency, if any, resulting 
from such redetermination. 

(Signed) C. M. CHAREST, 
General Counsel, 
Bureau of Internal Revenue. 
Of Counsel: 

HENRY A. COX, 
Special Attorney, 
Bureau of Internal Revenue. 

[Endorsed] : United States Board of Tax Appeals. 
Received Apr. 19, 1932. 

[Endorsed] : United States Board of Tax Appeals. 
Filed Apr. 19, 1932. [31] 



Comm. of Internal Revenue 31 

[Title of Court and Cause— Nos. 47630 and 52685.] 

MOTION TO CONSOLIDATE. 

Petitions in the above entitled proceedings were 
tiled by Lizzie H. Glide, appealing from deticiencies 
asserted against her by the respondent for the tax- 
able years 1926 and 1927. Substantially the same 
issues are presented by both appeals. The appeal in 
Docket No. 47630 has been set down for hearing at 
Washington, D. C, on April 20, 1932. In order that 
both appeals may be disposed of in one proceeding 
it is 

MOVED that the proceedings in Docket Xos. 
47630 and 52685 be consolidated for hearing and 
decision. 

Respectfully submitted, 

F. E. YOUNGMAN 

Counsel for Petitioner 
c/o Brewster, Ivins & Phillips, 
Southern Building, 
Washington, D. C. 

[Endorsed] : United States Board of Tax Ap- 
peals. Granted Apr. 9, 1932, (Signed) Logan Morris, 
Member. 

[Endorsed]: United States Board of Tax Ap- 
peals. Filed Mar. 30, 1932. [32] 



32 Lizzie H. Glide vs. 

[Title of Court and Cause — Consolidated Cases.] 

STIPULATION. 

Counsel for the respective parties hereby agree, 
subject to tlie right of either party to introduce fur- 
ther evidence not inconsistent herewith, that the fol- 
lowing facts may be taken as true for the purpose 
of this case. 

1. The petitioner is an individual residing at 
Berkeley, California. 

2. The respondent has proposed deficiencies in 
income tax against the petitioner for the taxable 
years 1926 and 1927 in the respective amounts of 
$34,045.12 and $8,843.50. 

3. Prior to 1913 the petitioner acquired by dis- 
tribution from the estate of her husband, Joseph H. 
Glide, the fee title to certain tracts of land in the 
State of California, within what is now generally 
known as the Mt. Poso Oil Field of California, 
including the lands leased under the terms of the 
agreements hereinafter described. 

4. Under date of June 30, 1925, the petitioner 
entered into an agreement with John K. Porter of 
Los Angeles, California, which agreement was on 
August 6, 1925 assigned by said Porter to the Shell 
Oil Company of California. A duplicate original 
copy of said agreement is attached hereto and 
marked Exhibit No. 1. A true copy of said assign- 
ment is attached hereto as Exhibit No. 2 [33] Pur- 
suant to the terms of said agreement of June 30, 
1925, the petitioner received during the year 1926 
the sum of $5,510. 



Comm. of Internal Revenue 33 

5. Under date of May 13, 1926, the petitioner 
entered into an agreement with J. R. Dorsey and 
Allan B. Campbell, representatives of the Gilmore 
Oil Company of California, a duplicate original 
copy of which is attached liereto and marked Ex- 
hibit No. 3. During the year 1926, the petitioner 
received the sum of $2,000 from the Gilmore Oil 
Company as consideration for extending the time 
within which to comply with certain drilling require- 
ments specified in said agreement of May 13, 1926. 
During the year 1927, the petitioner received the 
sum of $2,000 from the Gilmore Oil Company as 
consideration for extending the time within which 
to comply with certain drilling requirements speci- 
fied in said agreement of May 13, 1926. 

6. Under date of May 24, 1926, the petitioner 
entered into an agTeement with the General Petro- 
leum Corporation of California, a duplicate original 
copy of which is attached hereto and marked Ex- 
hibit No. 4. The agreement of May 24, 1926 was 
deposited in escrow by the petitioner with the Kern 
County Abstract Company, Bakersfield, California, 
with certain escrow instructions, a true copy of 
which is attached hereto and marked Exhibit No. 5. 
The General Petroleum Corporation at the same 
time deposited the sum of $100,000 in escrow with 
the Kern County Abstract Company to be paid to 
petitioner as consideration for the execution and 
delivery of said agreement of May 24, 1926. There- 
after, and on or about June 1, 1926, the escrow 
instructions were completed and thereupon the Kern 



34 Lizzie H. Glide vs. 

County Abstract Company delivered the agreement 
of May 24, 1926 to the General Petroleum Corpora- 
tion and paid to the petitioner the sum of $100,000 
on June 1, 1926. [34] 

7. On May 28, 1926, the petitioner entered into 
an agreement with General Petroleum Corporation 
of California, a duplicate original copy of which is 
attached hereto and marked Exhibit No. 6. As con- 
sideration for the execution of the agreement of 
^[ay 28, 1926, the General Petroleum Corporation 
paid to the petitioner in 1926 the sum of $48,000. 
During the year 1927, the petitioner received from 
the General Petroleum Corporation a total sum of 
$5,500 as cash consideration for granting extensions 
of time to the General Petroleum Corporation with- 
in which to comply with certain drilling require- 
ments specified in said agreements of May 24 and 
May 28, 1926. 

^. Under date of June 29, 1926, the petitioner 
entered into an agreement with the California 
Petroleum Corporation of California, a duplicate 
original copy of which is attached hereto and 
marked Exhil)it No. 7. The agreement of June 29, 
1926, was deposited in escrow by the petitioner 
with the Kem County Abstract Company with cer- 
tain escrow instructions, a true copy of which is 
attached hereto and marked Exhibit No. 8. The 
California Petroleum Corporation at the same time 
deposited the sum of $30,000 in escrow with the 
Kern County Al)stract Company to })e paid to peti- 
tioner as consideration for the execution and de- 



Comm. of Internal Revenue 35 

livery of said agreement of .Aine 29, 1926. There- 
after and on or a])out Jnly 28, 1926, tlie escrow 
instructions were completed and tlierenpon the Kern 
County Abstract Company delivered the agreement 
of Jime 29, 1926 to the California Petroleum Corpo- 
ration and paid to the petitioner the sum of $30,000 
on eJuly 28, 1926. During the year 1927, the peti- 
tioner received [35] from the California Petroleum 
Corporation the sum of $3,360 as casli consideration 
for the extension of time within which the Califor- 
nia Petroleum Corporation was required to comply 
with, certain drilling requirements specified in said 
agreement of June 29, 1926. 

9. Under date of June 30, 1926, the petitioner 
entered into an agTeement with R. M. Sands, repre- 
sentative of the Petroleum Securities Company of 
California, a duplicate original copy of which is 
attached hereto and marked Exhibit No. 9, The 
agreement of June 30, 1926 was deposited in escrow^ 
by the petitioner with the Title Guarantee & Trust 
Company, Los Angeles, California. The sum of 
$354,153.00 was at the same time deposited witli 
said Title Guarantee & Trust Company hy the 
grantee under joint escrow instructions executed by 
the petitioner and the grantee, a true copy of which 
instructions is attached hereto and marked Exhibit 
No. 10. Upon completion of its escrow instructions, 
the Title Guarantee & Trust Company delivered the 
agreement of June 30, 1926 to the grantee and paid 
the petitioner the sum of $354,153.00 on July 27, 
1926, as consideration for the execution and delivery 



36 Lizzie H. Glide vs. 

of said agreement. The petitioner was not at that 
time able to make good title to Section 35, T. 27 
S., R. 28 E. mentioned in the agreement of June 30, 
1926. Sul)sequent to that date, however, she per- 
fected her title to the SI/2 t>f Section 35 and on 
August 19, 1926 received a further cash payment 
of $40,000 from the Petroleum Securities Com])any 
as further consideration for the execution and de- 
livery of said agreement of June 30, 1926. During 
1927 the petitioner perfected her title to the N i/o 
of Section 35, T. 27 S., R. 28 E., and during July, 
1927 received the further sum [36] of $21,000 from 
the Petroleum Securities Company as further con- 
sideration for the execution and delivery of said 
agreement of June 30, 1926. During 1927 the peti- 
tioner received the sum of $5,065 from the Petro- 
leum Securities Company as consideration provided 
in the agreement of June 30, 1926, for the extension 
of time within which to comply with drilling re- 
quirements specified therein. 

10. Under date of June 14, 1926 the petitioner 
entered into an agreement with the Shell Company 
of California, a duplicate original copy of which is 
attached hereto and marked Exhil)it No. 11. The 
agreement of June 14, 1926 was deposited in escrow 
by the petitioner under instructions similar to those 
heretofore mentioned. Said Shell CVimpany at the 
same time deposited tlu^ sum of $96,000 in escrow 
to be paid to petitioner upon delivery of said agree- 
ment of June 14, 1926 and as consideration therefor. 
During the year 1927, the escrow instructions were 



Comm. of Internal Revenue 37 

completed and thereupon the petitioner received 
the said sum of $96,000. During the year 1927 the 
petitioner received from the Shell Company the sum 
of $10,580 as cash consideration for tlie extension of 
time within which the Shell Company was required 
to comply with certain drilling requirements speci- 
fied in other similar oil leases from the petitioner. 

11. During- the year 1927 the petitioner received 
from the Superior Oil Company the sum of $1,900 
as cash consideration for the extension of time with- 
in which to comply with certain drilling require- 
ments specified in a lease of certain oil properties 
leased to the Superior Oil Company. [37] 

12. On June 17, 1927 the petitioner filed her in- 
come tax return for the year 1926 with the Collector 
of Internal Revenue at San Francisco, California. 

13. On March 15, 1928, the petitioner filed her 
income tax return for 1927 with the Collector of 
Internal Revenue at San Francisco, California. 

14. In her 1926 return, the petitioner reported 
as part of her gross income the sum of $5,510 re- 
ceived from the Shell Oil Company of California, 
the siun of $2,000 received from the Gilmore Oil 
Company, the sum of $148,000 received from the 
General Petroleum Corporation, the sum of $30,000 
received from California Petroleum Corporation, 
and the sum of $394,153 received from the Petro- 
leum Securities Company, — totaling $579,663. 

15. In computing her net income for 1926 the 
petitioner deducted the sum of $159,407.32 as deple- 
tion at the rate of 27%% on the above amount of 
$579,663. 



38 Lizzie H. Glide vs. 

16. In her 1927 return the petitioner reported as 
part of her gross income the sums of $106,580 re- 
ceived from tlie Shell Oil Company, $5,500 received 
from the General Petroleum Corporation, the sum 
of $2,000 received from the Gilmore Oil Company, 
the sum of $3,360 received from the California 
Petroleum Corporation, the sum of $29,065 received 
from the Petroleum Securities Company, and the 
sum of $1,900 received from the Superior Oil Com- 
pany,— a total of $118,501. 

17. In her 1927 return the petitioner deducted as 
depletion at the rate of 27%^r on the above $118,- 
405, the smn of $10,811.38. [38] 

18. During the year 1926 there were no oil or 
gas wells in existence upon any of the properties 
covered by any of the agTeements hereinabove men- 
tioned executed in 1925 or 1926. During the year 
1927, there w^ere no oil or gas welLs in existence 
upon any of the properties covered by any of such 
agreements executed in 1926 or 1927; but during the 
year 1926 oil was discovered in commercial quanti- 
ties on other properties in T. 27 S., R. 28 E. within 
the Mt. Poso oil held. 

19. Certain properties owned by petitioner and 
leased by her to otliers for farming purposes were 
included within the West Sacramento Reclamation 
District No. 900, a reclamation district duly organ- 
ized under the laws of the State of California. 
Assessments were levied upon the lands of petitioner 
by said reclamation disti'ict which included interest 
upon the bonds of said reclamation district. Of the 
amount of tlie assessment })v said reclamation dis- 



Comm. of Internal Revenue 39 

trict paid by petitioner in 1926, $805.02 represented 
an assessment to pay such interest. Of the amount 
of the assessment by said reclamation district paid 
by petitioner in 1927, $805.02 represented an assess- 
ment to pay such interest. 

20. In her 1926 and 1927 income tax returns the 
petitioner deducted the amount of $805.02 paid each 
year as interest on bonds of the West Sacramento 
Reclamation District No. 900. 

21. In adjusting petitioner's tax liability f<^r 
1926 and 1927, the respondent has included as in- 
come said sum of $579,663 and $148,504, mentioned 
in paragraphs 14 and 16 above, and has disallowed 
the deductions of $159,407.32 and $40,811.38 claimed 
as depletion and has likewise disallowed the deduc- 
tions of $805.02 in each year as interest paid. [39] 

22. It is agreed that the charitable contributions 
of the petitioner during 1926 and 1927 exceeded the 
15% allowable by law as deductions, and that any 
adjustment of net income will require an adjustment 
of allowable deductions for contributions. 

(sgd) F. E. YOUNGMAN 

Counsel for Petitioner, 
(sgd) C. M. CHAREST 

General Counsel, 
Bureau of Internal Revenue. [40] 



40 Lizzie H. Glide vs. 

Stipulation 

EXHIBIT NO. 2. 

In re : Lizzie H. Glide 

Docket Nos. 47630, 52685 

ASSIGNMENT OF LEASE #1 

THIS AGREEMENT, made this 6tli day of Aug- 
ust 1925 by and between John K. Porter and Grace 
A. Porter, his wife, parties of the first part, and 
Shell Company of California, a California Corpor- 
ation, party of the second part : 

AVITNESSETH: 

THAT WHEREAS, by an agreement bearing 
date the 30th day of June, 1925, Lizzie H. Glide did 
lease and let unto the said John K. Porter for oil 
development purposes the following described lands 
situate in Kern County, California, to wit: 

Parcel No. 1— The North half (Ni/o) of Section 
L Township 27 South, Range 27 East, M.D.B. & M. 

Parcel No. 2— The North half (Ni/o) of Section 
7, Township 27 South, Range 28 East, M.D.B. & M. 

AND WHEREAS, hy said agreement, the said 
Lizzie H. Glide did grant unto the said John K. 
Porter, upon terms and conditions therein stated, 
the right and option to have executed to him, as 
Lessee, an Oil and Gas Lease covering the following 
described lands, in said County, to wit: 

Parcel No. 1— The South half (Sy.) of Section 1, 
Township 27 South, Range 27 East, M.D.B. & M. 



Comm. of Internal lievenue 41 

Parcel No. 2— The South half (81/2) of Section 7, 
Township 27 South, Range 28 East, M.D.B. & M. 

NOW THEREFORE, for and in consideration of 
the sum of ten dollars ($10.00) to them, cash in hand 
paid by the party of the second part, the receipt of 
which is hereby acknowledged, the parties of the 
first part do hereby grant, assign, transfer and set 
over unto the party of the second part, and to its 
successors and assigns the Oil and Gas Lease and 
option aforesaid, together with all of their rights, 
privileges and elections thereunder. 

IN WITNESS WHEREOF, the said parties of 
the first part have hereunto set their hands the day 
and year first herein written. 

JOHN K. PORTER 
GRACE A. PORTER 

State of California 
County of Los Angeles — ss. 

On this sixth day of August 1925, before me, M. 
H. Egan, a Notary Public in and for said County 
and State, residing therein, duly commissioned and 
sworn, personally appeared John K. Porter and 
Grace A. Porter, personally known to me to be the 
persons whose names subscribed [41] to the within 
instrument, and acknowledged to me that they exe- 
cuted the same. 

IN WITNESS WHEREOF, I have hereunto set 
my hand and affixed my official seal the day and year 
in this certificate first above written. 

[Seal] M.H. EGAN 

Notary Public in and for the County of Los Angeles, 
State of California. 



42 Lizzie H. Glide vs. 

Recorded at Request of Shell Co. of California, 
August 19, 1925 at 11 am in Book 86 of Official 
Records page 451 Kern County Records. 

CHAS. H. SHOMATE, Recorder 
Checked by I. Francis. 
13418 Compared by: G. Glenn [42] 



Stipulation 

EXHIBIT NO. 5 

In re : Lizzie H. Glide 

Docket Nos. 47630, 52685 

ESCROW INSTRUCTIONS 

Berkeley, California. 
May 25, 1926. 
Kern County Abstract Company, 
Bakersfield, California. 

Attention — Mr. H. C. Yates, Secretary. 
Gentlemen : 

I hand you herewith duplicate originals of Oil and 
Gas Lease properly executed and acknowledged by 
the undersigned as Lessor, and the General Petrol- 
eum Corporation of California as Lessee, covering 
the Southwest quarter of Sec. 27, the North one- 
half of Sec. 33, the Northeast quarter of Sec. 19, 
and the Southwest quarter of Sec. 21, all in Town- 
ship 27 South, Range 28 East M.B.B. & M. 

You are instructed to prepare your unlimited 
certificate of title with a limit of liability of $100,000. 



Comm. of Internal Revenue 43 

and to deliver one copy of said original leases to 
said General Petroleum Corporation of California, 
and the other copy of said original lease to the ini- 
dersigned at 160 The Uplands, Berkeley, (California, 
when you can secure for me the sum of $100,000. 
out of which you are authorized to deduct your 
charges for issuing said unlimited certificate of title 
and one-half your escrow charges. 

If you are unable to comply with these instruc- 
tions within thirty days from the date hereof, you 
are instructed to return said leases to me marked 
''canceled". 

Yours very truly, 

(signed) LIZZIE H. GLIDE [43] 



Stipulation 

EXHIBIT NO. 8 

In re : Lizzie H. Glide 

Docket Nos. 47630, 52685 

Berkeley, California. 
June 23, 1926. 
Kern County Abstract Company, 
Bakersfield, California. 
Gentlemen : 

I hand you herewith executed oil and gas lease in 
duplicate between Lizzie H. Glide as lessor and 
the California Petroleum Corporation of Califor- 
nia as lessee covering the following described lands, 
to-wit : 



44 Lizzie H. Glide vs. 

NW 14 of Section 21 Township 27 South Range 
28EastM. D.M. 
containing 160 acres more or less. 

You are hereby authorized to record the original 
and deliver the duplicate to nie at my address as 
given below when you can hold for my account the 
sum of Thirty Thousand Dollars ($30,000.00). Upon 
the recording of said lease you will forward this 
amoimt to me at once. 

The California Petroleum Corporation is to pay 
all expenses connected with the search of this title 
and guaranty covering same, together wdth your 
escrow charges. 

The California Petroleum Corporation is to de- 
posit with you at the same time these leases are de- 
posited the full amount of Thirty Thousand Dollars. 
Yours very truly, 

LIZZIE H. GLIDE 
160 Uplands, 
Berkeley, California. [44] 



Comm. of Internal Revenue 45 

Stipulation 

EXHIBIT NO. 10 

In re : Lizzie H. Glide, 

Docket Nos. 47630, 52685 

Los Angeles, California. 
July 10, 1926. 
Title Guarantee and Trust Company, 
Los Angeles, California. 
Gentlemen : 

The undersigned LIZZIE H. GLIDE, acting 
through her attorney, WILBERT MORGRAGE, 
and R. M. SANDS, acting through his attorney, 
Olin Wellborn, Jr., hand you herewith two 
duplicate originals of a certain Indenture of Lease 

bearing date the day of July, 1926, executed 

b}^ the said Lizzie H. Glide, as Lessor, to the said 
R. M. Sands, as Lessee, leasing and demising unto 
said Lessee the real property in said Indenture de- 
scribed, upon the terms and conditions therein spec- 
ified. 

The undersigned R. M. Sands also hands you 
herewith a check in the sum of $354,153.00, w^hich 
you are authorized to cash forthwith. 

You are authorized to cause one duplicate original 
of said Indenture of Lease to be recorded in the 
Office of the County Recorder of Kern County, Cal- 
ifornia, (with directions to said County Recorder 
to return the same when recorded to said R. M. 
Sands, 1039 Petroleum Securities Building, Los 
Angeles, California), when you have ascertained 



46 Lizzie H. Glide vs. 

that the Bakersfield Abstract Company, of Bakers- 
field, California, is in a position to issue an unlim- 
ited Guarantee of Title, which shall in turn be 
guaranteed by the Title Guarantee & Trust Com- 
pany, of Los Angeles, California, for the benefit 
and protection of the said R. M. Sands, which shall 
guarantee to the said R. M. Sands in the sum of 
$350,000.00 that the record title to the real property 
described in the hereto attached Schedule (which is 
marked Schedule A, and by reference made a part 
hereof), is vested in the said Lizzie H. Glide, free 
of all encumbrances except (1) the encumbrances 
expressly set forth in said Schedule A, and (2) the 
Indenture of Lease handed you herewith. The prop- 
erty in said Schedule A is the same as the property 
described in and demised by said Indenture of Lease, 
except as to Section 35, Township 27, Range 28 East, 
M.D.B. & M., which is omitted from said Schedule 
A, and concerning which you are not required to 
make any examination of title or procure any Guar- 
antee. 

When you have recorded the Indenture of Lease 
and procured and hold for delivery to R. M. Sands 
the Guarantee of Title above described, issued in 
the manner aforesaid, you are authorized to deliver 
the remaining duplicate original of said Indenture 
of Lease to said Lizzie H. Glide, and to pay to her 
or her order the sum of $354,153.00. [45] 

The undersigned Lizzie IT. Glide, will pay the 
cost of said Guarantee of Title (except the portion 



Comm. of Internal Revenue 47 

thereof usually referred to as the "new owner's 
fee," which shall be paid by R. M. Sands), and the 
said R. M. Sands will pay the cost of recording said 
Indenture of Lease. All other charges in connection 
with this escrow are to be borne by the undersigned 
in equal parts. 

If you are unable to comply with the conditions 
of this escrow within thirty (30) days from the date 
hereof, you are directed to cancel each of the dup- 
licate originals of said Indenture of Lease by 
obliterating the signatures thereon and return the 
same so cancelled to the said Lizzie H. Glide, and 
repay to the said R. M. Sands the said sum of 
$354,153.00. 

Very truly yours, 

LIZZIE H. GLIDE 

By 

Her attorney 

R. M. SANDS 

By 

His attorney 

[Endorsed] : United States Board of Tax Appeals. 
Filed at hearing Apr. 20, 1932. [46] 



[Title of Court and Cause — Consolidated Cases.] 

MOTION FOR LEAVE TO REOPEN AND 
INTRODUCE FURTHER TESTIMONY 

Counsel for the petitioner in the above entitled 
proceedings respectfully moves that the above cases 



48 Lizzie H. Glide vs. 

be reopened and restored to the General Calendar to 
permit the introduction of additional evidence, and 
as grounds for such motion states as follows : 

The above proceedings were submitted on a stip- 
ulation of facts agreed to by counsel for both parties. 
At the time the stipulation was submitted it was not 
believed by either party that the question of the 
proved character of the leased premises was ma- 
terial. Since this case was heard, the Supreme 
Court has rendered decisions in Murphy Oil Co. v. 

Commissioner, U. S , 53 S. Ct. 161, and 

Burnet v. Harmel, U. S , 53 S. Ct. 74. The 

General Counsel of the Bureau of Internal Revenue 
has published G. C. M. 11384, Internal Revenue Bul- 
letin of January 16, 1933, p. 2, purporting to in- 
terpret the effect of the Supreme Court's decision 
in the Murphy Oil Company case. [47] 

Such facts as were stipulated by counsel in the 
above cases do not bring the case within those pro- 
visions of G. C. M. ]1384 in which the Bureau of 
Internal Revemie recognizes that bonuses paid for 
execution of oil and gas leases are subject to per- 
centage depletion. While counsel for the petitioner 
do not concede that the decision in the Murphy Oil 
Company case is susceptible of the interpretation 
placed upon it by the Bureau of Internal Revenue, 
the facts in the instant cases are such that further 
evidence can be introduced to bring the cases within 
the scope of the Bureau's ruling. Counsel for the 
petitioner do not want to subject this taxpayer to 



Comm. of Internal Revenue 49 

the expense and uncertainty of further litigation 
and, in the light of such Bureau ruling, consider 
it necessary to the proper protection of the interest 
of the client that the evidence be presented which 
will bring this case within this new Bureau ruling. 

The property of the petitioner covered by the 
leases referred to in stipulation of facts heretofore 
filed is all located in the Mt. Poso oil field in Cali- 
fornia. In addition to the tracts of land specifically 
referred to in those leases, the petitioner owned 
other large tracts including practically all of the 
alternate sections of T. 27 S., R. 28 E., Mt. Diablo 
Base and Meridian, and certain alternate sections 
in T. 27 S., R. 27 E., Mt. Diablo Base and Meridian. 
At the time the leases mentioned above were executed 
by the petitioner that portion of the Mt. Poso oil 
field lyino' within Townships 27 S. and 28 S., R. 28 
E., was known to contain valuable oil deposits, and 
future production under the petitioner's leases was 
practically assured because of nearby wells and 
known geological indications. This explains wliy 
such large sums were paid to the [48] petitioner 
for execution of some of the leases in question. 

The first discovery of nil in the Mt. Poso field ^vri=^ 
m.ade in 1923 by T. A. Piper on Section 11 of T. 27 
S., R. 28 E., on land owned by tliis petitioner. Tn 
February, 1926, John K. Porter completed a well in 
Section 32 of T. 27 S., R. 28 E., which showed oil 
in commercial quantities, and in March, 1926, the 
Shell Oil Company struck oil in paying quantities 



50 Lizzie H. Glide vs. 

on Section 9 of T. 27 S., R. 28 E. Most of the lea.^es 
executed by this petitioner during the years 1926 
and 1927 were executed subsequent to the completion 
of the wells mentioned above. 

The Twelfth Annual Rej^ort of the State Oil and 
Gas Supervisor issued by the California State 
Mining- Bureau (Chapter No. 7, issued in January, 
1927) contains a report on the Mt. Poso oil field 
prepared by V. H. Wilhelm, oeologist, and L. W. 
Saunders, petroleum engineer of the California 
Petroleum Corporation. This report is copied in 
full and is annexed hereto as Exhibit A. A coi)y 
of one of the maps accompanying the report is also 
attached as part of Exhibit A. 

Before the end of 1927 there were 13 producing 
wells in the Mt. Poso oil field. Tlieir initial produc- 
tion varied from 150 to 2,100 ])arrels of oil ])er day, 
the gravity ranging from 15° to 17° Baume. On De- 
cember 31, 1928, there were 29 producing wells on 
land covered by the leases executed by the petitioner 
and referred to in the stipulation already on file. 

The foregoing facts can be proved and \\dll bring 
this petitioner within the ])i'ovisions of C C. M. 
11384, supra, and will entitle her to the percentage 
depletion claimed. Und(^r the circumstances she 
should be i)ermitted to prove such facts as are perti- 
nent to this inquiry. [49] 

This case was tried ])efore the Board on April 20, 
1932, and submitted on May 20, 1932. No decision 
has yet been promulgated, the Board having with- 
held its decision pending decision hy the Su])reme 



Comm. of Internal Eevenue 51 

Court of the two cases cited above. The Board hav- 
ing awaited these decisions, and the opinion in the 
Murphy Oil Company case having modified the 
Board's earlier decision, it is respectfully submitted 
that it is proper that these cases be reopened for 
further testimony, not material under prior Board 
decisions but which may now be material and is so 
regarded by the Bureau of Internal Revenue. 

F. E. YOUNGMAN 

Counsel for Petitioner 
c/o Brewster, Ivins & Phillips, 
805 Fifteenth Street, N. W., 
Washington, D. C. [50] 



EXHIBIT ''A" 

REPORT ON THE MT. POSO OIL FIELD 

By V. H. Wilhelm and L. W. Saunders."" 
Introduction and Location. 

The Mt. Poso oil field is located on the east side 
of the San Joaquin Valley, sixteen miles northeast 
of the town of Bakersfield, in Kern County, Cali- 
fornia, in the northwest portion of T. 27 S., R. 28 
E., M. D. B and M. 

Mt. Poso is the most northerly of the three oil 
fields on the east side of the San Joaquin Valley, 
and secures production from older beds of the Ter- 
tiary than that obtained by the remaining two. Pro- 



(a) Wilhelm, V. H., Geologist, California Petro- 
leum Corporation. Saunders, L. W., Petroleum En- 
gineer, California Petroleum Cori^oration. 



52 Lizzie H. Glide vs. 

ductioii in the Kern River field is obtained from 
beds of the Kern River series, which are generally 
considered to be fresh water deposits of Pliocene 
age, equivalent to the Marine Etchegoin elsewhere. 
The Kern Front field, midway between tlie Kern 
River and Mt. Poso fields, also secures production 
from the Kern River series, l)ut directly beneatli a 
marine phase of the Etchegoin that fingers into the 
Kern River series and which is thought to provide 
the necessary cap rock. The productive zone of the 
Mt. Poso field lies within the Tem})lor (middle Mio- 
cene), which is an older formation, geologically, and 
similar to the main producing zone of the Coalinga 
field. 

The exact stratigraphic relationship of the pro 
ductive beds in the Kern River and Kern Front 
fields has not been determined; but the interval ])e- 
tween the productive zones of the Kern Front and 
Mt. Poso districts is approximately 1800 feet, that 
of Mt. Poso being the lower. 
History. 

The first well in this inmiediate area was drilled 
in the southwest corner of Sec. 32, T. 26 S., R. 28 
E., by John K. Porter, in the early part of 1926. 
This well failed to secure a watershut-off, although 
some saturated oil sands were cored, which indicated 
that the area might be favoral)le for a conmiercial 
accumulation of oil. 

Showings obtained in tlie Porter well induciMl 
Shell Company of California, which had made a 
detailed investigation of the area, to spud in its well 
No. "Vedder" 1, in the northwest corner of Sec. 9, 



Comm. of Internal Bevenne 53 

T. 27 S., R. 28 E., in March, 1926. This well was 
made a deep test to the granite at 3067 feet, and 
was later plugged back to 1979 feet for an initial 
production of 300 barrels of oil per day of 15.5 de- 
grees A.P.I, gravit^y. The successful completion of 
. this well started a leasing- and drilling campaign 
which has resulted in twelve i)roducing' wells and 
several dry holes. [51] 

Initial production of wells in the field varies from 
250 to 1000 barrels of oil per day. The gravity ranges 
from 15 to 16.5 degrees A.P.I. All wells are closed 
in as soon as completed, as the field has no pipe line 
connections at the present time. 
Topography. 

The topography of the country consists of the 
rolling foothills of the Sierra Nevada Range. The 
major drainage in this district is to the south and 
east, through a series of small washes which connect 
Avith Poso Creek. The general average ground ele- 
vation is 1100 to 1200 feet above sea level. The base 
elevation for the fields is established as 1215 feet 
by the United States Geological Survey bench-mark 
on the summit of Mt. Poso. 
Geology. ' "I 

The structure controlling the accimiulation of oil 
in the field is a southwesterly dipping monocline in 
which the productive Vedder zone is truncated and 
sealed on the northeast by a normal fault trending 
about north 20 degrees west. The hade of this fault 
is approximately 50 degrees northeast. The fault 
consists of a fractured zone of stepfaulting rather 



54 Lizzie H. Glide vs. 

than a single plane of slippage, vriih aggTegate 
downthrow of from 150 to 250 feet to the east. The 
conditions were such that impervious shale ])eds 
were l)roiight into position opposite the porous sands 
of the Vedder zone, and it is in the upper limits 
of these porous sands that accumulation has taken 
place. The general strike of the heds is ahout north 
20 to 25 degrees west, practically parallel to the 
fault which limits the field on the east side. The 
dip of the Yedder zone is between 5 and 6 degrees 
to the southwest. This attitude is maintained with 
great regnlarity for a distance of at least six miles, 
although the Yedder zone at outlying locations con- 
tains only a few feet of saturated sands in the upper 
portion. 

Topography of the area has very little relation- 
ship to the underground structure. Practically all 
data on faulting have been accumulated from well 
logs, although there is some evidence of faulting in 
the surface beds of the Kern River series in the 
valley trending north and south a short distance 
west of California Petroleum Corporation well No. 
'^ Glide" 1, in Sec. 15, T. 27 S., R. 28 E., in the drilling 
of which the fault was first definitely located. This 
well penetrated the zone of major faulting at 1780 
feet, although minor faulting with fracturing of the 
beds occurred below a depth of 1500 feet. The ver- 
tical throw of the major fault at this location ap- 
y)ears to be in excess of 160 feet. One-half mile 
northwest of well No. ''Glide" 1, wells No. " Vedder- 
Rall" 1 and "Vedder" 4 of 81iell (^ompany of Cali- 



Comm. of Internal Revenue 55 

foriiia passed tliroiigli this fault at shallow depths, 
tinding- the productive sand undisturbed on the 
southwest side of the structure. 
Formations Penetrated. 

Kern River-Etchegoin Series. The surface form- 
ations in the field consist of the Kern River series 
of probable Pliocene age. These beds are thought 
to be of fresh water delta origin, characterized [52] 
by an entire absence of fossil markers, and are 
largely composed of muddy, coarse, unsorted sands 
and clays, with intercalated beds of coarser gravell}" 
materials. 

The sands have a characteristic greenish cast in 
cores and are coarser near the surface, but finer 
toward the base of the series. The Marine Etchegoin, 
which may include a portion of the productive form- 
ations of the Kern Front district, is not productive 
in the Mt. Poso field. Its period of deposition seems 
to have been contemporaneous, however, with that of 
the KeiTi River series, as well logs and cores show 
a transition from one to the other and back again. 
This might possibly be explained by movement of 
the basin of sedimentation while deposition was 
going on, so that a fingering-in of the Marine Etche- 
goin took place at intervals during the time that tlie 
Kern River sediments, which are characteristically 
fluviatile, were being laid down. 

In the proved area of the field, the Kern River 
series has a thickness which varies from 250 to 600 
feet, but thinning is apparent along the southwest 
side of the fault, where it has been subjected to 
gTeater erosion. There is also, ]Drobably, consider- 



56 Lizzie H. Glide vs. 

able thiimiug- to the northeast toward the granite 
outcrop. To the southwest, away from the Mt. Poso 
field, and down the dip, the series thickens greatly 
until, as shown on the section, at Midland Oilfields 
Company, Ltd. well No. ''McNeil" 1, sec. 34, T. 26 
S., R. 27 E., and John Lucas and Associates well 
No. 1, sec. 10, T. 27 S., R. 27 E., it has a vertical 
extent or some 1800 feet. 

Temblor. The Temblor formation (Middle Mio- 
cene) unconformably underlies the Kern River- 
Etchegoin series, and consists mainly of finely sorted 
sands, nuid or silt stones, and sandy micaceous 
shales with numerous diatoms and foraminifera. 
The top of the Temblor is marked by a bed of sandy 
brown shale with radiolaria and abundant diatoms. 
To the west of the fault line, this bed has a regular 
thickness of about 50 feet, but to the east of the 
fault, the thickness is much more irregular, only 
one foot being found in Shell Company of California 
well No. "Vedder-Rall" 1, which started east of 
the fault and passed through it at a depth of about 
600 feet. It is possible that a portion of this brown 
shale marker has been faulted out at this location. 

Underlying the brown shale marker at tlie contact 
are a series of beds made up of diatomite, gray 
shaley sand, and streaks of brown shale, all of which 
carry numerous fossils and micro-organisms. At an 
interval of some 1250 feet below the Temblor con- 
tact, a body of fine grained shaley sand or silstone 
is encountered which is impregnated with oil. This 
oily shale has a thickness which varies from 50 to 



Comm. of Internal Revenue 51 

250 feet, being greatest toward the fault, and 
directly overlies the coarse sands of the productive 
Vedder zone. Tests made of this sandy shale zone 
indicate that it has a potential production of 5 to 
8 barrels of oil per day. It is not customary at the 
present time to set perforated casing opposite this 
shale bod}', for the reason that tlie production to l)e 
obtained is of such quantity that it probably would 
not justify the expense of the additional [53] screen 
pipe; and, due to the relatively low saturation and 
considerable porosity, oil may be lost into it from 
the more productive sands below. 

The sands of the Vedder zone lie just below the 
oily shale at an average depth of 1-100 feet l^elow 
the top of the Temblor. The top of the Vedder zone 
is encountered beneath a hard, limey shell, composed 
largely of sea shells. The first few^ feet of coarse 
sand directly ])eneath this calcareous shell is brown 
in color, indicating incomplete saturation. 

The producing zone is made up of coarse, angular, 
to medium grained, well-rounded sands, separated 
by numerous hard calcareous shells containing sea 
shells. The maximum thickness of saturated sands 
in the zone is about 85 feet, but a thinning takes 
place down the dip to the southwest, mitil, at a dis- 
tance of about three-quarters of a mile from the 
place at which the zone is truncated by the fault, 
the upper 40 feet of sand only appears to carry oil. 

No definite bottom water has been encountered in 
the gray sands below the Vedder zone in the main 
portion of the field, but edgewater was located in 



'58 Lizzie H. Glide vs. 

Bariisdall Oil Company of California well Xo. 2 at 
some depth between 40 and 60 feet below the top 
of the Tedder zone. The gradation from produc- 
tive oil sand to gray water sand at this location ap- 
peared to be gradual, indicating a natural condition 
of edge water on the lower flank of the structure. 

The bottom of the Vedder zone is marked by a 
bed of sea shells, although some of the wells on the 
upper limits of the structure have logged additional 
thin oil sands below the shell bed. 

Underlying the Vedder zone are from 550 to 650 
feet of marine sediments of Temblor age, making a 
total thickness of 2000 to 2100 feet of this formation 
in the proved area of the field. 

The log of Shell Company of C^alifornia well No. 
"Vedder" 1, Avhich was drilled to the granite base- 
ment, indicates a possible second oil zone in wells 
drilled close to the southwest side of the fault line, 
about 30 feet above the base of the Temblor. The 
showings in No. "Vedder" 1 would not indicate pro- 
duction at that location, but it is possible that higher 
on the structure, where the greatest accunuilation of 
oil is to be expected, this zone might be considerably 
thicker and more saturated. 

Walker Formation. Lying uncomfortably below 
the Temblor are a series of land laid beds consisting 
of sands and shales of a characteristic greenish 
color. Only three wells have penetrated this entire 
series, as follows : 

1. Midland Oilfields Co., Ltd. well No. "McNeil" 
3, Sec. 34, T. 26 S., R. 27 E. This well is located 



Comm. of Internal Revenue 59 

four miles northwest of the proved area and pene- 
trated 370 feet of the formation. 

2. Shell Company of California No. "Vedder" 1, 
Sec. 9, T. 27 S., R. 28 E. This well is located along 
the southwest edge of the proved area, and pene- 
trated 555 feet of the Walker formation. [54] 

3. California Petroleum Corporation Xo. 
^' Glide" 1, Sec. 15, T. 27 S., R. 28 E. This well was 
drilled on the fault line along the northeast side of 
the field and penetrated 594 feet of the formation. 
These data indicate that this formation thickens to 
the east toward the granite outcrop. 

The Walker formation changes rapidly in type 
from bed to bed, and may be considered to be formed 
from variable proportions of two types of con- 
stituents. 

1. Granitic. Including widespread un sorted 
angular quartz grains, and white decomposed feld- 
spar grains; large Biotite flakes and dark green 
and red opaque clays. 

2. Volcanic. Including white clays and ashy 
materials, and shales; also green soapy clays which 
form the matrix for fragmentary granitic debris. 

The Walker formation has a widespread distri- 
bution in the area, and is characteristically con- 
tinental in origin. Its deposition represents the first 
stage of erosion of the old granitic land mass to 
the east. 

Granite. The granite in this area outcrops three 
miles to the northeast of the Mt. Poso field, and 
forms the basement complex below the sedimentary 
series. The three wells previously mentioned are the 



60 Lizzie H. Glide vs. 

only ones in this district that were drilled to a suf- 
ficient depth to locate the top of the granite. The 
data obtained indicates, however, that the erosional 
surface has a very gentle slope to the southwest. 
Technology. 

All wells in the field have been drilled with rotary 
tools, and many of them were cored practically from 
the surface. Extra wide cutters have been used on 
the core shoes, in some instances, to eliminate the 
necessity of reaming the hole prior to setting casing. 
The core barrel has been found as satisfactory for 
making hole as the fishtail bit, except in very hard 
formations. It has been the general policy to cement 
an 11-inch water string in the oily brown shale at 
from 50 to 100 feet above the Vedder sand. It is 
not likely, however, that this shale contributes an 
important proportion of oil to the well. 

The field is rather imusual in that little or no 
water occurs in the formations above the oil sand. 
Consequently, one of the most dif^cult problems has 
been to secure a good source of drilling water. This 
low fluid level of the upper formations and the very 
gTeat porosity of the sands have been the cause 
of losing circulation at intervals, and in many in- 
stances it has been impossible to secure return circu- 
lation until after the water string has been cemented. 
This condition has been aggravated in wells that 
have penetrated the fractured shale zone along the 
fault, although in general it has not been limited to 
wells that liave drilled through the fault. 

In California Petroleum Corporation well No. 
''Glide" 1, Sec. 15, [55] T. L>7 S., R. 28 P]., a hard 



Comm. of Internal Revenue 61 

shell was encountered at 1520 feet. After drilling 
through this shell all fluid left the hole, presumably 
due to a fault crevice. Every possible effort was 
made to mud up this faulted zone by pumping in 
mud, barley hay, cement, and cottonseed waste. The 
fluid level, however, could not be raised above 200 
feet, and the hole w^as finally cored ahead without 
return circulation to 1749 feet, and the 11-inch 
casing cemented at a depth of 1740 feet. Midland 
Oilfields Co., Ltd. w^ell No. "Alta Vedder" 1, Sec. 
4, T. 27 S., R. 28 E., was drilled from 1080 to 1670 
feet in the same manner, although return circulation 
w^as obtained several times, only to be lost again. 
Shell Company of California has followed this pro- 
cedure with success in the drilling of wells on the 
*'Yedder" lease. 

Proved Area. 

The field has a present proved area of about 700 
acres. It is probable, however, that this area will be 
extended both to the northwest and southeast along 
the west side of the fault line. To the southwest, 
the proved area is limited by the dry hole of Petro- 
leum Securities Company near the west quarter cor- 
ner of Sec. 8, T. 27 S., R. 28 E., and the edgewater 
condition encountered in Barnsdall Oil Company of 
California well No. 2, near the northeast corner of 
the same section. East of the fault Superior Oil 
Company drilled a dry hole near the west quarter 
corner of Sec. 10, in the same township. This indi- 
cates that the Vedder zone is not productive to the 
immediate east. 



62' Lizzie H, Glide vs. 

Producing Conditions. 

At this time a production of at least 5000 barrels 
I3er day is closed in in the field. This production, 
whicli is flush, could probably be increased to twice 
that amount hy an extensive drilling campaign on 
the part of the companies owning acreage in the 
district. The fact that individual holdings are large, 
and additional production is not needed by the in- 
dustry at the present time, makes it unlikely that 
the development of the field will proceed at a rapid 
rate. 

An interesting condition of the held is the rela- 
tively small amount of gas associated with the oil, 
the migration apparently being primarily due to 
gravity and the pressure of edgewater. This condi- 
tion is similar to that of the Kern Front field, where 
some wells maintain practically steady production 
for the first year with no appreciable decline. It is 
well recognized that decline of gas pressure is one 
of the most important factors limiting the produc- 
tivity of a new field. Inasmuch as gas is probably 
of secondary importance in the Mt. Poso district, 
no rapid rate of decline is expected. 

It is possible that when all wells are placed on 
production at the same time, which will probably 
happen when pipe line connections to the field are 
provided, the initial production of individual wells 
will be less than earlier brief ])r()duction tests have 
indicated. 

( 'onclusion. 

At present the proved area of the field is al)out 700 
acres, but the limits have not been reached in a 
northwesterly and southeasterly direction. [56] 



Comm. of Internal Revenue 63 

The sliut-iii production of the field as of May 1, 
1927, amounts to about 5000 barrels of oil per day. 
This shut-in production may easily be increased 
by further drilling activity. 

It seems unlikely, however, that extensive de- 
velopment of the field will be undertaken by the var- 
ious companies interested in the district for the 
reason that the acreage is held in relatively large 
parcels. The field has yet no pipe line connections, 
and market conditions are such that the additional 
oil would prove only a disturbing factor in price 
levels. 

[Endorsed] : United States Board of Tax Appeals. 
Filed Apr. 3, 1933. 

[Endorsed] : United States Board of Tax Appeals. 
Denied May 9, 1933. Edgar J. Goodrich, Member. 
[57] 



MAP or 

MTPOSO OIL FIELD 

Oeyehp/ns/r/- //? fi^e D/s/r/c/^ ss of 
Afiv /. /Sdl 5ai>surffce Qrr fours o/r /op of/^ 
proctuc//M Zb/ra. Prodfd/e. /odsf/ev? ' 
of /^,gi/// ^ ^pprvx/mfffe' //mffs of 
£if^ H9!^ //r /He HfdVer Zoff& . 







S0IM7 MiDiog BurMU. Ficiiig page 10. 



Comm. of Internal Revenue 65 

[Title of Court and Cause— Docket Nos. 47630, 
52685.] 

Promulgated April 26, 1933. 

1. Bonus payments received in consideration of 
leases on oil lands may not be reduced by an allow- 
ance for depletion where there is no well on the 
property ; 

2. And are not to be taxed as capital net gain. 

3. Amounts paid as assessments for interest on 
bonds of reclamation district are deductible from 
income. 

F. E. Youngman, Esq., for the petitioner. 

Homer Hendricks, Esq., filed brief as amicus curiae. 

H. A. Cox, Esq., for the respondent. 

OPINION. 

GOODRICH: In these proceedings, which were 
consolidated for hearing, petitioner attacks respond- 
ent 's determinations of deficiencies in income tax 
for the years 1926 and 1927 in the amounts of 
$34,045.12 and $8,843.50, respectively. 

The issues are: (1) AVhether petitioner is entitled 
to deduct from her income as an allowance for de- 
pletion 27I/2 per centum of the amounts received as 
bonuses for leases of oil lands; (2) whether such 
bonus payments are taxable as capital gain imder 
the provisions of section 208, Revenue Act of 1926 ; 
(3) whether petitioner may deduct from her income 
amounts paid by her as interest on bonds of a recla- 
mation district. 



66 Lizzie H. Glide vs. 

As our findings of fact we adopt the stipulation of 
the parties upon which the case was submitted, to- 
gether with the various exhibits attached thereto. 
For the purposes of this report only a brief state- 
ment is necessary concerning the facts. 

Petitioner was the owner of certain lands situate 
within what is generally known as the Mt. Poso Oil 
Field in California. During the years 1925, 1926 
and 1927 she granted to several individuals and cor- 
porations, various oil and gas leases embracing spec- 
ified portions [59] of her properties. In 1926 peti- 
tioner received $577,663 as bonus payments upon 
such leases, and $2,000 as consideration for exten- 
sions of time within which to comply with the drill- 
ing requirements of the leases, a total of $579,663, 
all of which she reported in her return. In 1927 
petitioner received $120,000 as bonus payments upon 
leases and $28,405 as consideration for extensions 
of time within which to comply with drilling re- 
quirements, a total of $148,405, all of which she 
rc^ported in her return. Upon her returns for each 
of these years she deducted as a depletion allow- 
ance 27% per centum of the total amounts received 
as above stated. Respondent has disallowed these 
deductions and that action gives rise to the greater 
part of the deficiencies herein. During the years 
3925, 1926 and 1927 there were no oil or gas wells 
upon the properties owned by petitioner and cov- 
ered by the leases. In 1926 oil was discovered in 
commercial quantities on other properties within 



Comm. of Internal Revenue 67 

tiie Mt. Poso Field, the distauce from petitioner's 
lands not being disclosed by the record. 

Certain of petitioner's properties, leased by her 
for farming purposes, lay within the West Sacra- 
mento Reclamation District No. 900, which levied 
assessments which included interest on its bonds. 
Both in 1926 and 1927 petitioner paid $805.02 as an 
assessment to pay such interest. These amounts 
respondent has denied as deductions from peti- 
tioner's income for those years. 

At the onset we observe that the parties appar- 
ently make no distinction between the amounts re- 
ceived by petitioner as bonuses and amounts re- 
ceived as consideration for extensions of time within 
which to comply with the drilling requirements of 
the leases. We suggest that perhaps a distinction 
should be made. It may be that amounts received 
for granting extensions are in the nature of dam- 
ages for breach of contract, arising under the lease 
as consideration for the forbearance of enforcement 
of the forfeiture provisions covering the lessee's 
failure to drill within a specified time, and are not 
to be included as "income from the property" in 
computing the allowance for depletion. If so, the 
amounts so received by petitioner, namely, $2,000 
in 1926, and $28,405 in 1927, would be removed 
from the controversy respecting the depletion al- 
lowance. We raise the question, but do not decide 
it for it is unnecessary for us to do so in the view 
we take of the case. 



68 Lizzie H. Glide vs. 

There is no occasion for extended discussion con- 
cerning the nature of the bonus payments received 
by petitioner in connection with the leases granted 
upon her lands. Respondent concedes, as petitioner 
contends and as the decisions hold, that they con- 
stitute payment for oil in advance ; are a lump sum 
or down payment of a part [60] of the royalty ; may 
be reduced by an allowance for depletion as are 
royalties; and are a part of the ''net income from 
the property" as that term is used in the statute. 
Work V. United States ex rel Hosier, 261 U. S. 352 ; 
Nelson Land & Oil Co., 3 B. T. A. 315; Murphy Oil 
Co. V. Burnet, 53 S. Ct. 161; Samuel Kraemer, 25 
B. T. A. 686; Burnet v. Harmel, 287 U. S. 103; 
Darby-Lynde v. Alexander, 51 Fed. (2d) 56; cer- 
tiorari denied, 284 U. S. 666; Palmer v. Bender, 

U. S ; 53 Sup. Ct. 225; Dakota-Montana Oil 

Co., U. S (Mar. 13, 1933) ; United States v. 

Ludey, 247 U. S. 295; Burnet v. Thompson Oil & 
Gas Co., 283 U. S. 301. But respondent does con- 
tend, and we agree with him, that wliere there is no 
production from the property there can be no de- 
pletion allowance in reduction of income from the 
property. 

Minerals, including oil and gas, and, of course, 
other elements which need not here be mentioned, 
are wasting assets. By removal or production they 
are severed from the reserve body in which they are 
found and the removal reduces both the quantity and 
the total value of that reserve without opportunity 
for replacement. For that reason the Congress saw 



Comm. of Internal Revenue G9 

lit to provide for a depletion allowance as a deduc- 
tion from the income derived from the removal and 
sale of the asset and, theoretically at least, the al- 
lowance will return to the owner his cost of the re- 
serve by the time it is completely exhausted through 
removals. That deduction is not a matter of right ; 
authority for it nmst be found in the statute, and, 
begiiming with the Revenue Act of 1913 and contin- 
uing through the subsequent revenue acts, provision 
has been made for some allowance for depletion in 
the case of operating mines and oil and gas wells. 
Burnet v. Thompson Oil & Gas Co., supra; Darby- 
Lynde v. Alexander, supra. 

The Revenue Act of 1926 is controlling of the case 
at bar. Section 214 (a) (9) of that act provides 
for a deduction from income of a reasonable allow- 
ance for depletion, in the case of oil and gas welU, 
to be made under rules and regulations to be made 
by the Commissioner. Section 204 (c) (2) provides 
that "in the case of oil and gas wells the allowance 
for depletion shall be 27% per centum of the gross 
income from the property." It is to be noted that 
the statute uses the words "oil and gas wells," and 
that it makes no provision for an allowance for de- 
pletion of "income from the property," though it 
uses that phrase in fixing^ the measure of the gross 
income upon which the depletion allowance is to be 
computed. 

Under this act the Commissioner issued Regula- 
tions 69, containing various instructions respecting 



70 Lizzie H. Glide vs. 

the computation of depletion allowances and in par- 
ticular Article 216, relating to adjustment for [61] 
bonuses, which, in turn, was further explained in a 
ruling, I.T. 2384, VI-2 C. B. 22, reading in part as 
follows : 

It will be noted that the above-quoted section 
of the law operates only in cases of oil and gas 
wells and that the allowance for depletion at the 
rate therein provided is expressly limited to the 
gross income from such property. Accordingly, 
it nuist be concluded that the application of 
article 216 (e) of Regulations 69 is dependent 
upon whether or not the lease in question is of 
an oil or gas well, and that article 216 (e) of 
the regulations does not apply to leases covering 
X)roperties on which no well is in existence. 

We uphold this interpretation as reasonable and 
correct. Strictly adhering to the clear wording of 
the statute, an existing well is a prerequisite to an 
allowance for depletion. 

To stretch this unambiguous provision, as peti- 
tioner would have us do, to permit that allowance 
whore there is no well on the property, but only a 
possibility or prospect that a well may be drilled 
in the future, would not only be contrary to the 
statute and to the Commissioner's ruling promul- 
gated thereunder, })ut would circumvent the moti- 
vating principle and reason for such an allowance. 
Depletion is insepara])ly related to production ; it 
denotes a consuinption of the reserve by means of 



Comm. of Internal Bevenue 71 

which income is realized, resulting in a correspond- 
ing diminution of the value of the remainder of the 
asset. Unless there is production, neither the 
quantity nor value of the recoverable asset is de- 
pleted and there is no occasion for an allowance 
therefore. The reserve is intact, and the owner needs 
no compensation for its waste, for he has not parted 
with it. 

It is urged that the decisions above cited require 
that an allowance for depletion be made even where, 
as here, no well had been drilled on the property. 
With that we cannot agree. In each of those cases 
the properties were producing when the issues arose 
and the language of the several decisions indicates 
beyond doubt that the courts were fully cognizant 
of that fact. Consequently, the question whether 
bonus payments were subject to depletion allowance 
in the absence of wells upon the properties was not 
before the courts. Moreover, those cases (except 
Dakota-Montana Oil Co.) arose under acts prior to 
that here controlling, which provided for the com- 
putation of the depletion allowance upon a unit 
basis, necessitating an apportionment and adjust- 
ment of the depletion allowance between the bonuses 
and royalties. The 1926 Act provides for depletion, 
where allowable, at a flat rate and, in our opinion, 
that change, which made obsolete the Commission- 
er's regulations and rulings concerning the determ- 
ination of the unit rate, requires a further consider- 
ation of the matter. [62] 



72 Lizzie H. Glide vs. 

We are aware that the Commissioner recently has 
issued a ruling which would permit the reduction 
of a lease bonus by an allowance for depletion, even 
though there be no well on the property, where pro- 
duction is obtained within the same taxable year in 
which the bonus w^as paid, or where future produc- 
tion is practically assured because of nearby wells 
and geological indications. See G. C. M. 11384, Jan- 
uary 16, 1933. We need not pass upon that ruling, 
for in the case at bar neither of those situations is 
presented. Here, no well was drilled wdthin the tax- 
able year and, while it is stipulated that oil was 
discovered within the Mt. Poso Field in 1926, we 
have no evidence as to the distance of the discovery 
from petitioner's properties, the uniformity of the 
field, or the exploitation plans of petitioner's lessees, 
from which we might determine the possibility of 
development upon her lands. 

Concerning petitioner's claim that the bonus pay- 
ments should be taxed as capital gain under the 
provisions of section 208 (a), Revenue Act of 1926, 
we need only point out that this contention is dis- 
posed of adversely to her by the decision of the 
Su])reme Court in Burnet v. Harmel, supra. 

Since respondent concedes that the last issue 
herein is controlled by our prior decisions in An- 
drew Little, 21 B. T. A. 911, and Lee Wilson & Co., 
25 B. T. A. 840, upon authority of those decisions 
we sustain petitioner's claim to a deduction of 
$805.02 paid in each of the taxable years before us. 



Comm. of Internal Revenue 73 

Reviewed by the Board. 

Judgment will be entered under Rule 50. 

VAN FOSSAN, dissenting: I find it necessary 
to dissent from the decision of the majority. In 
considering the right of a taxpayer to depletion, I 
am unwilling to decide the question on any basis so 
highly technical and artificial as that employed in 
the prevailing opinion. Under the reasoning of the 
majority, the right to depletion depends on the ex- 
istence of a well on the property. Obviously the 
production of the well, provided there be a well, 
need bear no relation to the amount of depletion. 
The law allows a flat percentage of income from 
the property (not from the well) as depletion. The 
Supreme Court has held that a bonus is income. 
Therefore, if the bonus be paid and there happens 
to be a well in existence (however inconsequential 
the production) the taxpayer gets full statutory 
depletion. If there be no well, regardless of othei* 
conditions,- the taxpayer gets no depletion. But 
assume a case where, as frequently happens, a bonus 
is paid in one year and there is no [63] well com- 
pleted until the next year. The taxpayer would 
get no depletion on account of the bonus (or ad- 
vance royalties, as the Supreme Court has called 
them) because there was no well on the property 
though all surrounding property bore productive 
wells, nor would he get depletion of the bonus in 
the next year even if a producing well be completed, 
because the bonus was not income in that voar. 



74 Lizzie H. Glide vs. 

Variations of this illustration, emphasizing the ab- 
surdities of the situation, could easily be multiplied. 
I am unable to see any defensible basis for a dis- 
tinction that would produce such an inequitable and 
illogical result. The prevailing opinion introduces a 
new concept into the theory of depletion and in many 
cases sets at naught the intention of Congress as 
interpreted by the decisions of the Supreme Court 
so far as depletion of bonuses is concerned. Murphy 
Oil Co. V. Burnet, 53 S. Ct. 161. The cited case 
clearly decides that a bonus is depletable and makes 
no suggestion that this right should be governed 
by such a rule as laid down by the majority. The 
court clearly suggests the opposite : 

A distinction between royalties and bonus, 
which would allow a depletion deduction on tlie 
former but tax the latter in full as income, 
when received, making no provision for a rea- 
sonably anticipated production of oil on the 
leased premises, would deny the "reasonable 
allowance for depletion" which the statute pro- 
vides. * * * [ Italics supplied.] 

Moreover, 1 further find myself in disagreement 
with the majority opinion in the sunnnary manner 
in which G. C. M. 11384 is disposed of. That the 
Commissioner is not now contending for such a rule 
as proposed by the majority is clear from this mem- 
orandum, which provides that depletion should be 
allowed if future production is practically assured 
because of nearby wells and geological indications. 
Whether this interpretation is too narrow it is not 



Comm. of Internal Revenue 75 

necessary to discuss, but certainly it is broad enough 
to cover the instant case. The facts show that oil 
was being produced in the same township and in 
the same oil field. This brings the petitioner 
squarely within the first of the four situations re- 
ferred to in the memorandum. The prevailing 
opinion dismisses the matter on the basis of failure 
of proof. 

In my opinion the majority of the Board through- 
out this opinion have grasped at a shadow of diction 
and allowed the substance of the thought and inten- 
tion of Congress and the Supreme Court to escape 
them. 

LEECH agrees with this dissent. [64] 

[Seal] 



United States Board of Tax Appeals 
Washington 

Docket Nos. 47630, 52685 

LIZZIE H. GLIDE, 

Petitioner, 

vs. 

COMMISSIONER OF INTERNAL REVENUE, 

Respondent. 

DECISION. 

Pursuant to opinion herein pronuilgated April 
26, 1933, and directing that the deficiencies herein 
be determined and decision entered under Rule 50, 
respondent, on September 12, 1933, filed a proposed 



76 Lizzie H. Glide vs. 

recomputatioii and redetermination of deficiencies 
and notice thereof, \Yhicli were duly served upon 
petitioner. Thereafter, on October 3, 1933, petitioner 
])y counsel filed a motion for continuance of the 
settlement under Rule 50; and on October 4, 1933, 
the proceeding was called on the day calendar, 
whereupon, after argument, the motion for continu- 
ance was denied and settlement ordered, petitioner 
by counsel having conceded that the recomputation 
filed by respondent was correct under the Board's 
o])inion. It is therefore 

ORDERED AND DECIDED that there are de- 
ficiencies in income tax of this petitioner for the 
years 1926 and 1927 in the amount of $33,874.05 
and $8,672.42, respectively. 

[Seal] (Signed) EDGAR J. GOODRK^H, 

Member, United States Board of Tax Appeals. 

[Endorsed]: Entered Oct. 26, 1933. [65] 



[Title of Court and Cause — Consolidated Cases.] 

PETITION FOR REVIEW OF THE DE(JISION 
OF THE UNITED STATES BOARD OF 
TAX APPEALS. 

To the Circuit Court of Appeals for the Ninth 
Circuit : 
Your petitioner, Lizzie H. Glide, respectfully 
shows : 

I. 
This is a petition foi* review by the (Mrcuit (.ourt 
of Appeals for the Ninth Circuit of a decision en- 



Comm. of Internal Revenue 77 

tered by the United States Board of Tax Appeals 
under date of October 26, 1933, redetermining defi- 
ciencies in Federal income taxes against your peti- 
tioner for the years 1926 and 1927 in the respective 

amounts of $33,874.05 and $8,672.42. 

II. 

Your petitioner resides in the State of California 
within the jurisdiction of the Circuit (^ourt of Ap- 
peals for the Ninth Circuit, and filed her Federal 
income tax returns for 1926 and 1927 witli the 
Collector of Internal Revenue at San Francisco, 
California. \^66^ 

III. 

The nature of the controversy before the United 
States Board of Tax Appeals was the determination 
of your petitioner's liability for Federal income 
taxes under the Revenue Act of 1926, and involved, 
inter alia, the question whether your petitioner, in 
the determination of her income tax liability for the 
years 1926 and 1927, is entitled to deduct from her 
income as a reasonable allowance for depletion sums 
equal to 271/2 P^r centum of the amoimts she re- 
ceived during those years as bonuses or royalties up- 
on the execution of certain oil and gas leases. 

IV. 

The errors committed by the Board of Tax Ap- 
peals upon which your petitioner relies as a basis 
for this proceeding are: 

1. The Board erred in determining deficiencies 
in Federal income tax against the petitioner for 
the years 1926 and 1927. 



78 Lizzie H. Glide vs. 

2. The Board erred in refusing to allow as de- 
ductions from the petitioner's income for 1926 and 
1927 a reasonable allowance for depletion as autho- 
rized by statute. 

3. The Board erred in refusing to allow as rea- 
sonable allowances for depletion for 1926 and 1927 
sums equal to 27^/2 per centum of amounts received 
during such years as bonuses or royalties upon the 
execution of certain oil and gas leases. 

4. The Board erred in refusing to allow as de- 
ductions from income for 1926 and 1927 the re- 
spective amounts of $159,407.32 and $40,811.38 as 
reasonable allowances for depletion authorized by 
statute. [67] 

5. The Board erred in denying the petitioner's 
motion, filed April 3, 1933, for leave to reopen the 
proceedings before the Board and to introduce fur- 
ther testimony. 

WHEREFORE, your petitioner prays that this 
Court may review the decision of the Board of Tax 
Appeals, reverse such decision, and direct the Board 
of Tax Appeals to enter a decision determining the 
correct amount of deficiency, if any, due from your 
petitioner for the years 1926 and 1927. 

F. E. YOUNOMAN 

Attorney for Petitioner 
c/o Brewster, Ivins & Phillips, 
805 Fifteenth Street, N. W., 
Washington, D. C. [68] 



Comm. of Internal Revenue 79 

Affidavit 

District of Columbia. — ss. 

F. E. YoiiiigTiiaii, being lirst sworn, says: I am 
one of the attorneys for the petitioner named in 
the foregoing- petition. I prepared the foregoing 
petition for review and am familiar with the eon- 
tents thereof. The allegations of fact contained 
therein are true to the ))e8t of my knowledge and 
belief. This petition is not tiled for purposes of 
delay, and I believe the petitioner is justly entitled 
to the relief sought. 

F. E. YOUXOMAX 

Subscribed and sworn to before me this 20th day 
of January, 1934. 

[Seal] THERESE M. TANGORA 

Notary Public, IX C. 

[Endorsed] : United States Board of Tax Ap- 
peals. Filed Jan. 24, 1934. [69] 



[Title of Court and Cause — Consolidated Cases.] 

NOTICE OF FILING PETITION 
FOR REVIEW. 

E. Barrett Prettyman, Esq., 
General Counsel, 
Bureau of Internal Revenue, 
Washington, D. C. 

You are hereby notified that Lizzie H. Glide did 
on the 24th day of January, 1934, file with the Clerk 



80 Lizzie H. Glide vs. 

of the United States Board of Tax Appeals at 
Washington, D. C, a petition for review by the 
Circuit Court of Appeals for the Ninth Circuit of 
the decision of the Board of Tax Appeals rendered 
in the above entitled proceeding's. A copy of the 
petition for review and assignments of error as 
filed is attached hereto and served upon you. 
Dated this 24th day of January, 1934. 

F. E. YOUNGMAN 

Counsel for Petitioner 
c/o Brewster, Ivins & Phillips, 
805 Fifteenth Street, N. W., 
Washington, D. C. 

Service of the above notice, together with a copy 
of the petition for review and assignments of error 
mentioned therein is hereby acknowledged this 24th 
day of January, 1934. 

(Sgd) E. BARRETT PRETTYMAN 

General Counsel, 
Bureau of Internal Revenue. 

[Endorsed]: United States Board of Tax Ap- 
peals. Filed Jan. 24, 1934. [70] 



[Title of Court and Cause — Consolidated Cases.] 

PRAECIPE FOR TRANSC^RIPT 
OF RECORD. 

To the (^lerk of the United States Board of Tax 
Ap})eals : 
You will please prepare, and within the time pre- 
scribed by law therefor, or such time as extended 



Comni. of Internal Bevemie 81 

by order of the Board of Tax Appeals, transmit 
and deliver to the Clerk of the United States Circuit 
Court of Appeals for the Ninth (^ircuit, copies duly 
certified of the following documents : 

1. Docket entries of all proceedings before the 
Board of Tax Appeals. 

2. Amended petition, together with the motion 
for leave to amend and the Board's order 
granting such leave, in Docket No. 47630, and 
answer to the amended petition therein. 

3. Second amended petition, together with the 
motion for leave to amend and the Board's 
order granting such leave, in Docket No, 
52685, and answer to second amended petition 
therein. 

4. Motion for consolidation and the Board's or- 
der of consolidation. 

5. Stipulation of Facts filed with the Board on 
April 20, 1932, together with the documents 
attached to such stipulation and marked Ex- 
hibits Nos. 2, 5, 8 and 10. 

6. The physical documents, in their original 
form, attached to the Stipulation filed April 
20, 1932, which were marked Exhibits Nos. 1, 
3, 4, 6, 7, 9 and 11. [71] 

7. Motion filed April 3, 1933, by the petitioner 
for leave to reopen and introduce further tes- 
timony, together with the Board's order of 
denial. 

8. Order of the Circuit Court of Appeals for the 
Ninth Circuit authorizing the transmission of 
original exhibits. 



82 Lizzie H. Glide vs. 

9. Opinion and dissenting opinion, and decision 
of the Board of Tax Appeals. 

10. Petition for review showing notice of filing 
and acceptance of service by respondent. 

11. This praecipe for the record. 

The foregoing to be prepared, certified and trans- 
mitted as required by law and the rules of the 
Circuit Court of Appeals for the Ninth Circuit. 

F. E. YOUNGMAN 

Counsel for Petitioner. 
c/o Brewster, Ivins & Phillips, 
805 Fifteenth Street, N. W., 
Washington, D. C. 

Receipt of service of a copy of the foregoing 
praecipe for the record is hereby acknowledged this 
3d day of April, 1934. 

(Sgd) ROBERT H. JAC^KSON 
General Counsel, 
Bureau of Internal Revenue. [72] 



[Title of Court and Cause — Consolidated Cases.] 

CERTIFK^ATE. 

I, B. D. Gamble, clerk of the U. S. Board of Tax 
Appeals, do hereby certify that the foregoing pages, 
1 to 72, inclusive, contain and are a true copy of the 
transcript of record, papers, and proceedings on 
file and of record in my office as called for by the 
Praecipe in the appeal (or appeals) as above num- 
bered and entitled. 



Comm. of Internal Revenue 83 

111 testiiiioii.y whereof, I hereunto set my hand and 
affix the seal of the United States Board of Tax 
Appeals, at Washington, in the District of Colum- 
bia, this 25th day of April, 1934. 

[Seal] B. D. GAMBLE, 

Clerk, 
United States Board of Tax Appeals. 



United States Circuit Court of Appeals 
for the Ninth Circuit 

No. 7470 

LIZZIE H. GLIDE, 

Petitioner, 

V. 

GUY T. HELVERING, Commissioner of 
Internal Revenue, 

Respondent. 

ORDER. 

Upon motion of counsel for the above petitioner, 
and for good cause shown, it is hereby 

ORDERED : that the Clerk of the United States 
Board of Tax Appeals, in connection with the cer- 
tification and transmittal to this Court of the record 
on review in the proceeding in the Board of Tax 
Appeals entitled Lizzie H. Glide v. Commissioner, 
Docket Nos. 47630 and 52685 transmit to the Clerk 
of this Court, in their original form those certain 
documents identified as Exhibits No. 1, 3, 4, 6, 7, 9 
and 11 attached to the stipulation of facts filed with 



84 Lizzie H. Glide vs. 

the Board of Tax Appeals by the parties to said 
I)roceedings, and it is further 

ORDERED that copies of said documents iden- 
tified as Exhibits Xo. 1, 3, 4, 6, 7, 9 and 11 attached 
to the stipulation of facts filed with the Board of 
Tax Appeals in the proceeding before it entitled 
Lizzie H. Glide v. Commissioner, Docket Nos. 47630 
and 52685 need not be certified to the Clerk of this 
(^urt as part of the record on review of such pro- 
ceeding in this court and need not be included in the 
printed record before this court. 

(S) CURTIS D. WILBUR 

Circuit Judge. 

Now, May 14, 1934, the foregoing order certified 
from the record as a true copy. 

[Seal] B. D. GAMBLE, 

Clerk, 
Board of Tax Appeals. 

[Endorsed] : United States Board of Tax Ap- 
peals. Filed May 18, 1934. Paul P. O'Brien, Clerk. 



[Endorsed]: No. 7470. United States (^ircuit 
Court of Appeals for the Ninth Circuit. Lizzie H. 
Glide, Petitioner, vs. Commissioner of Internal 
Revenue, Respondent. Transcript of the Record. 
I^pon Petition to Review an Order of the Ignited 
States Board of Tax Appeals. 

Piled A])ril 30, 1934. 

PAUL P. ot>rii:n, 

Clerk of the United States Circuit Court of Appeals 
for the Ninth Circuit. 



No. 7472 

Wlnitth States! 

Circuit Court at Appeals; 

ifor tfje i^intti Circuit. 

^^ 

COMMISSIONER OF INTERNAL REVENUE, 

Petitioner, 

vs. 

SUSAN TALBOT RICKER, A. G. HARMS 
and WELLS-FARGO BANK AND UNION 
TRUST COMPANY, a Corporation, Co-Execu- 
tors of the Estate of WILLIAM H. TALBOT, 
Deceased, 

Respondents. 



©rauHrrtpt nf tlyp W^ttorh 



Upon Petition to Review an Order of the United States 
Board of Tax Appeals. 

FILED 

JUN -41934 

PAUL P. O'BRIEN, 

PARKER PRINTING COMPANY, 545 SANSOME STREET, SAN FRANCISCO 60—5-25-34 



No. 7472 

IBnitth States! 

Circuit Court of Appeals; 

Jfor tfje Minti) Circuit. 



COMMISSIONER OF INTERNAL REVENUE, 

Petitioner, 

vs. 

SUSAN TALBOT RICKER, A. G. HARMS 
and WELLS-EARGO BANK AND UNION 
TRUST COMPANY, a Corporation, Co-Execu- 
tors of the Estate of WILLIAM H. TALBOT, 
Deceased, 

Respondents. 



(Franarrtpt nf tl|p ^^inarh 



Upon Petition to Review an Order of the United States 
Board of Tax Appeals. 



PARKER PRINTING COMPANY. 54S SANSOME STREET, SAN FRANCISCO 80—5-25-34 



INDEX 

[Clerk's Note: When deemed likely to be of an important nature, 
errors or doubtful matters appearing in the original certified record aro 
printed literally in italic; and, likewise, cancelled matter appearing in 
the original certified record is printed and cancelled herein accordingly. 
When possible, an omission from the text is indicated by printing in 
italic the two words between which the omission seems to occur. J 

Page 
Amended Petition 14 

Exhibit "A" Attached to Amended Peti- 
tion — Notice of Deficiency in Tax, dated 
August 20, 1926 19 

Answer 13 

Answer to Amended Petition 22 

Appearances 1 

Clerk's Certificate (Docket No. 20409) 86 

Decision (Docket No. 20409) 61 

Docket Entries 2 

Motion for Reconsideration (Docket Nos. 
20407, 20409, 20411) 62 

Motion for Review by Full Board (Docket Nos. 
20407, 20409, 20411) 65 

Notice of Filing Petition for Review to Susan 
D. Talbot Ricker (Docket No. 20409) 78 

Notice of Filing Petition for Review to Wells 
Fargo Bank and Union Trust Company 
(Docket No. 20409) 79 

Opinion 43 

Order Correcting Opinion (Docket Nos. 20407, 
20409, 20411 ) 58 



11 INDEX 

Page 

Order Denying Motion for Review by Full 
Board (Docket Nos. 20407, 20409, 20411) 66 

Order Substituting Petitioners 23 

Petition 6 

Petition for Review and Notices of Filing 
(Docket No. 20409) 66 

Praecipe and Notices of Filing (Docket No. 
20409) 82 

Settlement under Rule 50 (Docket No. 40409) 59 

Stipulation of Facts 25 

Exhibit "A" Attached to Stipulation of 
Facts — Resolutions of Puget Mill Com- 
pany 39 



APPEARANCES: 

For Petitioners : 

F. G. BUTTS, C. P. A., 
JOHN B. MILLIKEN, Esq., 

(Withdrawn) 
H. H. TOOLEY, C. P. A. 

(Withdrawn) 
ANSON HERRICK, Esq., 
HARTLEY PEART, Esq. 
FRED BROWN, Esq., 
FRANK GUERENA, Esq. 

For Respondent: 

F. R. SHEARER, Esq. 



2 Coinmr. of Infemnl Rev. vs. 

Docket No. 20409 

WILLIAM H. TALBOT, (1919), 

Amended by Order of June 3, 1931 : 
SUSAN D. TALBOT, A. G. HARMS and WELLS 
FARGO BANK & UNION TRUST CO., Exec- 
utors of ESTATE OF WM. H. TALBOT, 
Deceased, 

Petitioners, 
vs. 

COMMISSIONER OF INTERNAL REVENUE, 

Respondent. 

DOCKET ENTRIES: 
1926 
Oct. 5 — Petition received and filed. Taxpayer 

notified. 
Oct. 7 — Copy of petition served on General 

Counsel. 
Dec. 12 — Motion for extension to 1/5/27 to file an- 
swer filed by General Counsel. 
Dec. 10 — Granted — both sides notified. 

1927 
Jan. 3 — Answer filed by General Counsel. 
Feb. 2 — Copy of answer served on taxpayer — 

Circuit Calendar. 
1930 
Jan. 4 — Motion for leave to amend petition filed 

by taxpayer — amended petition tendered. 

VI 0/30 granted. 
Jan. 9 — Notice of the appearance of John B. 

Milliken, attorney for taxpayer, filed. 
Jan. 13 — Copy of motion and amended petition 

served on (leneral Counsel. 



Susan Talbot Bicker et al. 3 

1930 

Feb. 28 — Answer to amended petition filed by Gen- 
eral Ccninsel. 3/10/30 copy served. 
1931 

Apr. 24— Hearing set June 23, 1931 at Oakland 
California. 

May 19 — Notice of the withdrawal of H. H. Tooley, 
counsel for taxpayer, filed. 

May 28 — Notice of appearance of Anson Herrick, 
Hartley Peart, Fred Brown and Frank 
Guerena, counsel for taxpayer, filed. 

May 28— Motion to substitute S. B. Talbot, A. G. 
Harms and Wells Fargo Bank & Union 
Trust Co., Executors of Estate of W. H. 
Talbot filed by taxpayer. 

June 3 — Order that Susan D. Talbot, A. G. Harms 
and Wells Fargo Bank & Union Trust 
Co., Executors of Estate of Wm. H. Tal- 
bot, Deceased, be substituted as petitioner 
entered. 

June 23 — Hearing had before W. C. Lansdon, Divi- 
sion 8, on merits. Motion to substitute 
parties, already filed, granted. Stipulation 
of facts filed. Petitioner's brief due Aug. 
1, 1931 and reply to respondent's reply 
due Oct. 1, 1931. Respondent's reply to 
petitioner due Sept. 1, 1931. [1*] 

June 29 — Brief filed by taxpayer — copy served. 

Aug. 28 — Motion for extension to 10/1/31 to file 
brief filed by General Counsel. 8/31/31 
granted. 



•Page numbering appearing at the foot of page of original certified 
Transcript of Becord. 



4 Commr. of Internal Rev. vs. 

1931 

Oct. 1 — Brief filed by General Counsel. 

Oct. 30— Motion for extension to 11/7/31 to file re- 
ply brief filed by taxpayer. 

Oct. 31 — Motion granted. 

Nov. 2 — Reply brief filed by taxpayer. Copy served 
11/3/31. 

Nov. 4 — Transcript of hearing of June 23, 1931 
filed. 

Nov. 13 — Memorandum filed by General Counsel. 
1933 

Feb. 28 — Opinion rendered — Wm. C. Lansdon, Divi- 
sion 8. Decision will be entered for 
petitioner. 

Mar. 3 — Order that report promulgated 2/28/33 be 
corrected to read, "Decision will be en- 
tered under Rule 50", entered. 

Apr. 24 — Notice of settlement filed by General 
Counsel. 

Apr. 26 — Hearing set May 17, under Rule 50. 

May 13 — Consent to settlement filed by taxpayer. 

May 27 — Decision entered — W. C. Lansdon, Divi- 
sion 8. 

]\Iay 27 — Motion for reconsideration filed by Gen- 
eral Counsel. 5/29/33 denied. 

June 3 — Motion for review^ by full Board filed ))y 
General Counsel. 

June 6 — Order denying motion for review by full 
Board entered. 

June 13 — Motion of the withdrawal of Claude I. 
Parker, J. B. Milliken, L. Luce, and H. H. 
I'ooley, c()un.sel for taxpayer, filed. 

Aug. 21 — Petition for review by U. S. Circuit Court 
of Anneals (9) with assicmments of error 



Susan Talbot Bicker et al. 5 

1933 

Aug". 30 — Proof of service filed by General Counsel. 

Sept. 2 — Proof of service filed by General Counsel. 

Sept. 2 — Affidavit of service filed. 

Oct. 7— Motion to extend time to Pec. 19, 1933 to 
complete record filed by General Counsel. 

Oct. 7 — Order enlarging time to Pec. 19, 1933 to 
prepare and transmit record entered. 

Pec. 11 — Motion for extension to 2/17/34 to com- 
plete record filed by General Counsel. 

Pec. 11 — Order enlarging time to 2/17/34 for prep- 
aration of the evidence and transmission 
and delivery of record, sur petition for 
review, entered. 
1934 

Feb. 12— Motion for extension to March 19, 1934 to 
complete and transmit record filed by Gen- 
eral Counsel. 

Feb. 12 — Order enlarging time to 3/19/34 to pre- 
pare evidence and deliver record sur peti- 
tion for review entered. 

Mar. 8 — Motion for extension to April 19, 1934 to 
complete and transmit record filed by Gen- 
eral Counsel. 

Mar. 8 — Order enlarging time to April 19, 1934 to 
prepare evidence and transmit record sur 
petition for review entered. 

Mar. 8 — Praecipe filed by General Counsel. 

Apr. 2 — Proof of service of praecipe filed (2). 

Apr. 19 — Order enlarging time to May 30, 1934 for 
transmission and delivery of record sur 
petition for review entered. [2] 



6 Coniwr. of Internal Rev. vs. 

Docket No. 20409 
United States Board of Tax Appeals 

WILLIAM TALBOT, 

Petitioner, 

vs. 

COMMISSIONER OF INTERNAL REVENUE, 

Respondent. 

PETITION 

The above named taxpa.yer hereby appeals from 
the determination of the Commissioner of Internal 
Revenue set forth in his deficiency letter (IT:PA: 
PYA-60D-ARM) dated August 20, 1926, and as the 
basis of his appeal sets forth the following : 
Jurisdiction of the Board 

1. The taxpayer is an individual with his office 
at 859 Third Street, San Francisco, California. 
(Deficiency notice addressed to "W. H. Talbot". 
Full given name shown in caption, alx^ve, to con- 
form to provisions of Rule 6, Rules of Practice 1)6- 
fore the United States Board of Tax Appeals, re- 
vised to April 1, 1926.) 

2. The deficiency letter (a copy of wliich is at- 
tached) was mailed to the taxpayer on August 20, 
1926. 

3. The tax in controversy is income tax for the 
calendar year 1919 and is more than $10,000.00, to- 
wit; forty-six thousand four hundred eighty eight 
and 05/100 dollars ($46,488.05). 



Susan Talbot Bicker et ah 7 

Assignments of Error 

4. The determination of tax contained in said 
deficiency letter is based upon the following errors : 

(a) The (^onnnissioner has included in the tax- 
payer's taxable net income dividends received from 
the Puget Mill Company, a corporation, in the 
amount of $90,458.17, which dividends were not paid 
out of earnings or profits accumulated since March 
1, 1913 and hence not taxable. 
Statement of Facts 

5. The facts upon which the taxpayer relics as 
the basis of his appeal are as follows: 

(a) During the year 1919 the Puget Mill Com- 
pany paid to its shareholders dividends in the 
amount of $650,000.00, no part of which was paid 
out of earnings or profits accumulated since March 
1, 1913, the corporation actually sustaining a net 
[3] loss during the period March 1, 1913 to De- 
cember 31, 1919, as the following Analysis of Earn- 
ings will show : 
1913— Deficit March 1st to 

December 31st $142,418.24 

1914 — Deficit on year's 

operations $303,474.16 

Income Tax for 1913 
on income Puget 
Trading Co. and 
Puget Commercial 
Co. absorbed 
12/31/13 1,232.46 304,706.62 



Deficit 3/1/13 to 

12/31/14 447,124.86 



8 Commr. of Internal Bev. vs. 

1915 — Deficit on year's 

operations 373,028.65 



Deficit 3/1/13 to 

12/31/15 820,153.51 

1916 — Deficit on year's 

operations $392,537.12 

Less Adjustment Tax 

Reserve 1913 10,000.00 382,537.12 



Deficit 3/1/13 to 

12/31/16 1,202,690.63 

1917— Deficit on year's 

operations $ 35,215.49 

Additional Income 
Tax 1913 on income 
of Piiget Mill Co. 
and Puget Com- 
mercial Co. 18,812.34 54,057.83 

Deficit 3/1/13 to 

12/31/17 1,256,748.46 



1918— Net Profit on year's 

operations $333,097.06 

Less 1917 Income Tax 1,244.28 331,852.78 



Deficit 3/1/13 to 

12/31/18 924,895.68 

1919— Net Profit on year's 

operations $171,911.28 

Less 1918 Income Tax 9,178.40 162,732.88 

Deficit 3/1/13 to 

12/31/19 $762,162.80 



Susan Talbot Bicker et al. 9 

WHEREFORE, the petitioner prays that this 
Board may hear the proceeding and reduce his tax- 
able income for the year 1919 by $90,458.17, the 
amount of non-taxable dividends received in that 
year from the Puget Mill Company which have 
been improperly included in such income. 

HOMER H. TOOLEY, C. P. A. 
(^ounsel for Taxpayer 
514 Crocker Building 
San Francisco, California. 
FRANK G. BUTTS, C. P. A. 
Of Counsel 

910-912 Investment Building 
Washington, D. C. [4] 

State of California 

City and County of San Francisco — ss. 

William H. Talbot, being duly sworn, says that 
he is the taxpayer named in the foregoing petition, 
and is familiar with the statements contained 
therein, and that the facts therein stated are true. 

WILLIAM H. TALBOT. 

Subscribed and sworn to before me this 28th day 
of September, 1926. 

[Seal] W. W. HEALEY 

Notary Public in and for the City & County of 
San Francisco, State of California. [5] 



10 Commr, of Internal Rev. vs. 

TREASURY DEPARTMENT 

Washington 
IT:PA:PYA-60D 
ARM 

Mr. W. H. Talbot, 
859 Third Street, 

San Francisco, Calif. 

August 20, 1926. 
Sir : 

Your claim for abatement of a deficiency in tax 
amounting to $154,663.09 assessed against you for 
the taxable year 1919 has been carefully considered 
l)y this office, and it is proposed to allow the said 
claim for $108,175.04 and to reject it for $46,488.05, 
as computed upon the inclosed statement. 

In accordance with the provisions of Section 
283(e) or Section 283 (k) of the Revenue Act of 
1926, you are allowed 60 days (not counting Sun- 
day as the sixtieth day) from the date of mailing 
of tliis letter within which to file a petition with 
the United States Board of Tax Appeals, Earle 
Building, Washington, D. C, contesting in whole or 
in part the correctness of this determination. 

If you acquiesce in this determination and do 
not desire to file such petition, you are requested to 
execute waiver of your right to file a petition with 
tlie United States Board of Tax Appeals on the 
inclosed Form A, and forward it to the Commis- 
sioner of Internal Revenue, Washington, D. C, 
for tlie attention of IT:PA:PYA-60D - ARM. In 
tlie event that you acquiesce in a i)art of the de- 



Sifsan Talhof Rider cf al. 11 

termination, the waiver sliould be executed witli 
respect to the items to which you agree. 

Respectfully, 
D. H. BLAIR 

Commissioner. 
By— (Signed) (\ R. NASH 
Inclosures: Assistant to the Commissioner 

Statement 
Form A [6] 

STATEMENT 
IT:PA.PYA-60D 
ARM 

In re: Mr. W. H. Talbot, 
859 Third Street, 
San Francisco, Calif. 

Claim for 
Year Abatement Allowed Rejected 

1919 $154,663.09 $108,175.04 $46,488.05 

A reaudit of your return has been made in 
connection with the report of the Supervising In- 
ternal Revenue Agent at San Francisco, (California, 
dated November 23, 1921, together with the addi- 
tional evidence furnished in your protest filed 
June 30, 1926 and in a conference held in this 
office July 13, 1926. 

The agent's report has been approved with the 
following exception: 

In accordance with the decision of the Solicitor 
of Internal Revenue that the provisions of Section 
220 of the Revenue Act of 1918 should not be ap- 



12 Commr. of Internal Bev. vs. 

plied to the Talbot Commercial Company or to its 
stockholders or members in 1919, income of $176,- 
870.16, included by the Examining Officer as being- 
taxable to yoii, has been eliminated. 

The action of the Examining Officer in including 
as taxable income the amount of $90,458.17, repre- 
senting dividends received from the Puget Mill 
Company, has been sustained since the information 
on file in this office indicates that the dividends in 
question are taxable 1007( • 

The resulting adjustment reduces your taxable net 
income from $349,278.16, shown in the report, to 
$172,408.00, and discloses an overassessment of 
$108,175.04. 

The overassessment shown herein will be made 
the subject of a Certificate of Overassessment which 
will reach you in due course through the office of 
the Collector <^f Internal Revenue for your district. 
If the tax in question has not been paid, the amount 
will be abated by the Collector. If the tax has been 
paid, the amoimt of overpayment will be first cred- 
ited against unpaid income tax for another year or 
years and the balance if any will be refunded to 
you by check of the Treasury Department. It will 
tlius be seen that the overassessment does not indi- 
cate th(^ amount which will be credited or refunded 
since a portion may be an assessment which has 
been entered but not paid. 

A copy of this letter is being forwarded to your 
representative, Mr. Frank O. Butts, 910 Investment 
Building, Washington, D. C. 

[Endorsed] : United States Board of Tax Ap- 
peals. Filed Oct. 5, 1926. [7] 



Sttsan Tallmt Rider ft al. 13 

[Title of Court and Cause.] 

ANSWP]R. 

The Commissioner of Internal Reveiuie, by bis 
attorney, A. W. Gregg, General Comisel, Bureau of 
Internal Revenue, for answer to tbe petition filed 
in the above-entitled appeal, admits and denies as 
follows : 

1. Admits the allegations contained in para- 
graph 1 of the petition. 

2. Admits the allegations contained in para- 
graph 2 of the petition. 

3. Admits the allegations contained in para- 
graph 3 of the petition. 

4. Denies that the Commissioner committed error 
as alleged in paragraph 4 of the petition. 

5. Admits that during the year 1919 tlie Puget 
Mill Company paid to its shareholders dividends in 
a sum amounting to at least $650,000.00. 

Expressly denies each and every allegation con- 
tained in paragraph 5 of the petition not herein- 
above admitted to be true. 

WHEREFORE, it is prayed that the taxpayer's 
appeal be denied. 

A. W. GREGG, 
General Counsel, 
Bureau of Internal Revenue. 
Of Counsel: 
GEORGE G. WITTER, 
Special Attorney, 
Bureau of Internal Revenue. 

[Endorsed] : United States Board of Tax Appeals. 
Filed. Jan. 3, 1927. [8] 



14 Commr. of Internal Rev. vs. 

[Title of Court and Cause.] 

AMENDED PETITION. 

The above named petitioner hereby petitions for a 
redetermination of the deficiency as set forth by the 
Commissioner of Internal Revenue in his notice of 
deficiency (IT:PA:PYA-60D-ARM) dated August 
20, 1926, and as a basis of his proceeding alleges 
as follows: 

(1) The petitioner is an individual with his prin- 
cipal office at 2700 Russ Building, San Francisco, 
California (formerly 859 Third Street, San Fran- 
cisco, California. Deficiency notice was addressed 
to "W. H. Talbot". Full given name shown in cap- 
tion, above, to conform to provisions of Rule 6, 
Rules of Practice before the United States Board of 
Tax Appeals, revised to May 1, 1928). 

(2) The notice of deficiency (a copy of which is 
attached hereto and marked Exhibit A) was mailed 
to the petitioner on August 20, 1926. 

(3) The taxes in controversy are income taxes for 
the [9] calendar year 1919 and are for more than 
$10,000.00, to-wit : The sum of Forty Six Thousand 
Four Hundred Eighty Eight and Five one Hun- 
dredths Dollars ($46,488.05). 

(4) The determination of tax contained in said 
deficiency notice is based upon the following errors : 

(a) The alleged lia])ility of petitioner as set 
forth in said notice of deficiency was terminated, 
extinguished and ceased to exist on February 
26, 1926. 



Susan Talbot Bicker et al. 15 

(b) The Conmiissioner has inehided in the 
taxpayers taxable net income dividends received 
from the Puget Mill Company, a corporation, in 
the amount of $90,458.17, which dividends were 
not paid out of earnings or x)rofits accumulated 
since March 1, 1913 and hence not taxable. 

(5) The facts upon which the petitioner relies as 
the basis of his appeal are as follows : 

(a) On or before June 15, 1920 the petitioner 
filed his income tax return for the calendar year 
1919 with the Collector of Internal Revenue at 
San Francisco, California. Said return was pre- 
pared upon the form and in the manner pre- 
scribed by the respondent and was filed within 
the prescribed time for filing by law or such 
time as extended by the respondent for filing 
without delinquency. On or about October 18, 
[10] 1923 and not later than October 18, 1923, 
the respondent assessed additional taxes against 
the petitioner in the amount of $154,663.09 for 
the calendar year 1919. The petitioner did not 
pay this assessment but filed a claim in abate- 
ment in the said sum of $154,663.09, which claim 
was accepted by the Collector of Internal Reve- 
nue at San Francisco, California. Petitioner has 
never signed any agreement or consent to an 
assessment or collection of any income taxes for 
the calendar year 1919 beyond the period for 
making assessment and collection of the tax as 
prescribed by law. Neither the respondent nor 



16 Commr. of Internal Bev. vs. 

the Collector of Internal Revenue has ever in- 
stituted proceedings in court or otherwise for 
the collection of the said assessment of $154,- 
663.09 or for any part of said amount for the 
calendar year 1919. 

(b) During the year 1919 the Puget Mill 
Company paid to its shareholders dividends in 
the amount of $650,000.00, no part of which 
was paid out of earnings or profits accumulated 
since March 1, 1913, the corporation actually 
sustaining a net loss during the period March 1, 
1913 to December 31, 1919, as the following 
Analysis of [11] Earnings will show: 

1913— Deficit March 1 to 

Dec. 31 $142,418.24 

1914 — Deficit on vear's 

operations * $303,474.16 

Income Tax for 1913 

on income Puget 

Trading Co. and 

Puget (Commercial 

Co. absorbed 

12/31/13 1,232.46 304,706.62 



Deficit 3/1/13 to 

12/31/14 447,124.86 

1915 — Deficit on year's 

operations 1)73,028.65 

Deficit a/1/13 to 

12/31/15 820,153.51 

1916 — Deficit on year's 

operations $392,537.12 

Less Adjustment Tax 

Reserve 1913 10,000.00 382,537.12 

Deficit 3/1/13 to 

12/31/16 1,202,690.63 



Susan Talbot Bicker et ah 17 

1917 — Deficit on year's 

operations $ 35,215.49 

Additional Income 
Tax 1913 on income 
of Pnget Mill Co. 
and Puget Com- 
mercial Co, 18,842.34 54,057.83 

Deficit 3/1/13 to — 

12/31/17 1,256,748.46 

1918 — Net Profit on year's 

operations " $333,097.06 

Less 1917 Income Tax 1,244.28 331,852.78 

Deficit 3/1/13 to 

12/31/18 924,895.68 

1919 — Net Profit on year's 

operations $171,911.28 

Less 1918 Inc. Tax 9,178.40 162,732.88 



Deficit 3/1/13 to 

12/31/19 $762,162.80 

(6) Wherefore, the petitioner j)rays for relief 
from the deficiency asserted by the respondent on 
the fol- [12] lowing particulars: 

(a) Neither the Respondent nor the Collec- 
tor of Internal Revenue has either collected or 
instituted proceedings to collect the said alleged 
deficiency within the period of time prescribed 
by law for the collection thereof and because of 
which fact such liability, if any existed, has been 
extinguished and no longer exists. 

(b) The Respondent has included an amount 
of $90,458.17 in the petitioner's taxable income 
for the year 1919, whereas said amount of $90,- 
458.17 was non-taxable dividends received in 



18 Commr. of Internal Be v. vs. 

that year from the Puget Mill Company. 

And petitioner further respectfully prays for 
such other and general relief which in the judg- 
ment of this Board it may be granted. 

WHEREFORE, the petitioner prays that this 
Board may hear and redetermine the deficiency 
herein alleged. 

ANSON HERRICK (Signed) 
Counsel for Taxpayer 
403 Merchants Exchange Bldg., 
San Francisco, California. 
JOHN B. MILLIKEN 
Of Counsel 
937 Munsey Bldg. 
Washington, D. C. [13] 

JURAT 

State of California, 

City and County of San Francisco — ss. 

William H. Talbot, being duly sworn, says that he 
is the taxpayer named in the foregoing amended 
petition, and is familiar with the statements con- 
tained therein, and that the facts therein stated are 
true. 

WILLIAM H. TALBOT. 

Subsci'il)ed and sworn to before me this 7th day 
of December, 1929. 

[Seal] (Sgd.) M. V. COLLINS, 

Notary Public in and for the City & County 
of San Francisco, State of California. 

My Commission will expire April 14, 1933. [14] 



Susan Talbot Bicker et al. 19 

EXHIBIT A 
TREASURY DEPARTMENT 

Washington 
IT :PA :PYA-60I) 
ARM 

Mr. W. H. Talbot, 
859 Third Street, 

San Francisco, Calif. August 20, 1926. 

Sir: 

Your claim for abatement of a deficiency in tax 
amounting to $154,663.09 assessed against you for 
the taxable year 1919 has been carefully considered 
by this office, and it is proposed to allow the said 
claim for $108,175.04 and to reject it for $46,488.05, 
as computed upon the inclosed statement. 

In accordance with the provisions of Section 
283(e) or Section 283(k) of the Revenue Act of 
1926, you are allowed 60 days (not counting Sunday 
as the sixtieth day) from the date of mailing of 
this letter within which to file a petition with the 
United States Board of Tax Appeals, Earle Build- 
ing, Washingon, I). C, contesting in whole or in 
part the correctness of this determination. 

If you acquiesce in this determination and do 
not desire to file such petition, you are requested to 
execute waiver of your right to file a petition with 
the United States Board of Tax Appeals on the 
inclosed Form A, and forward it to the Commis- 
sioner of Internal Revenue, Washington, D. C, for 
the attention of IT :PA :PYA-60D-ARM. In the 
event that you acquiesce in a part of the deter- 



20 Commr. of Internal Rev. vs. 

mination, the waiver should be executed with re- 
spect to the items to which you agree. 
Respectfully, 
D. H. BLAIR 

Commissioner. 
By (Signed) C. R. NASH 

Assistant to the Commissioner. 
Inclosures : 
Statement 
Form A [15] 

STATEMENT 
IT:PA:PYA-60D 
ARM 

In re : Mr. W. H. Talbot, 
859 Third Street, 
San Francisco, Calif. 

Year Claim for Abatement Allowed Rejected 
1919 $154,663.09 $108,175.04 $46,488.05 

A reaudit of your return has ])een made in con- 
nection with the report of the Supervising Internal 
Revenue Agent at San Francisco, California, dated 
November 23, 1921, together with the additional 
evidence furnished in your protest filed June 30, 
1926 and in a conference held in this office July 
13, 1926. 

The agent's report has ])een approved with the 
following exception : 

In accordance with the decision of the Solicitor 
of Internal Revenue that the provisions of Section 
220 of the Revenue Act of 1918 should not be 



Susan Talhot Bicker et ah 21 

applied to the Talbot Comercial Company or to 
its stockholders or members in 1919, income of $176,- 
870.16, included by the Examining Officer as being 
taxable to you, has been eliminated. 

The action of the Examining Officer in including 
as taxable income the amount of $90,458.17, repre- 
senting dividends received from the Puget Mill 
Company, has been sustained since the information 
on file in this office indicates that the dividends 
in question are taxable 100%. 

The resulting adjustment reduces your taxable net 
income from $349,278.16, shown in the report, to 
$172,408.00, and discloses an overassessment of 
$108,175.04. 

The overassessment shown herein will be made the 
subject of a Certificate of Overassessment which will 
reach you in due course through the office of the 
Collector of Internal Revenue for your district. If 
the tax in question has not been paid, the amount 
will be abated by the Collector. If the tax has been 
paid, the amount of overpayment will be first cred- 
ited against unpaid income tax for another year or 
years and the balance if any will be refunded to you 
by check of the Treasury Department. It will thus 
be seen that the overassessment does not indicate 
the amount which will be credited or refunded since 
a portion may be an assessment which has been en- 
tered but not paid. 

A copy of this letter is being forwarded to your 
representative, Mr. Frank G. Butts, 910 Investment 
Building, Washington, D. C. 

[Endorsed] : United States Board of Tax A^)- 
peals. Filed Jan. 10, 1930. [16] 



22 Commr. of Internal Rev. vs. 

[Title of Court and Cause.] 

ANSWER TO AMENDED PETITION. 

The Commissioner of Internal Revenue by his at- 
torney, C. M. Charest, General Counsel, Bureau of 
Internal Revenue, for answer to the amended peti- 
tion of the above-named taxpayer, admits and de- 
nies as follows : 

1. Admits the allegation contained in paragraph 

1 of the petition. 

2. Admits the allegation contained in paragraph 

2 of the petition. 

3. Admits the allegation contained in paragraph 

3 of the petition. 

4. Denies that Commissioner erred as alleged in 
paragraph 4(a) and 4(b) of the petition. 

5. Denies generally and specifically each and 
every allegation set forth in taxpayer's petition not 
hereinbefore admitted, qualified or denied. 

WHEREFORE, it is prayed that the taxpayer's 
appeal be denied. 

(Signed) C. M. CHAREST, 

General Counsel, 
Bureau of Internal Revenue. 
Of Counsel: 
PHILIP M. CLARK, 
Special Attorney, 
Bureau of Internal Revenue. 
CCH :DEW^ 

[Endorsed] : United States Board of Tax Appeals. 
Filed. Feb. 28, 1930. [17] 



Susan Talbot Bicker et al. 23 

[Title of Court and Cause.] 

ORDER. 

On suggestion of death of the petitioner, and 
notice of tlie appointment of Executrix and Execu- 
tors in tlie above-entitled proceeding, it is 

ORDERED, that Susan D. Talbot, A. G. Harms 
and Wells Fargo Bank & Union Trust Company, 
Executrix and Executors of the Estate of William 
H. Talbot, deceased, be and hereby are substituted as 
petitioners in this proceeding in the place and stead 
of William H. Talbot deceased, and that the appeal 
shall proceed henceforth under the title of Susan D. 
Talbot, A. G. Harms and Wells Fargo Bank & 
Union Trust Company, Executrix and Executors 
of the Estate of William H. Talbot, deceased, v. 
Commissioner of Internal Revenue. 

[Seal] (s) LOGAN MORRIS, 

Member. 
Dated: Washington, D. C, 
June 3, 1931 [18] 

A true copy. 
Teste, 

B. D. GAMBLE, 

Clerk U. S. Board of Tax Appeals. 



24 Commr. of Internal Rev. vs. 

United States Board of Tax Appeals 
TALBOT C. WALKER, 



Petitioner 



V. 



COMMISSIONER OF INTERNAL 
REVENUE 

Respondent 

SUSAN D. TALBOT, A. G. HARMS, 
WELLS FARGO BANK & 
UNION TRUST COMPANY, 
EXECUTRIX AND EXECU- 
TORS OF ESTATE OF WIL- 
LIAM H. TALBOT, DECEASED. 

Petitioners 

V. 

COMMISSIONER OF INTERNAL 
REVENUE 

Respondent 

WELLS FARGO BANK & UNION 
TRUST COMPANY, ADMINIS- 
TRATOR WITH WILL AN- 
NEXED, ESTATE OF FRED- 
ERICK C. TALBOT, DECEASED 

Petitioner 

V. 

COMMISSIONER OF INTERNAL 
REVENUE 

Respondent 



Docket No. 20407 



Docket No. 20409 



Docket No. 20411 



[19] 



Susan Talbot Bicker et al. 25. 

STIPULATION OF FACTS 

Talbot C. Walker (Docket No. 20407), Susan D. 
Talbot, A. (1. Harms and Wells Fargo Bank & 
Union Trust Company, Executrix and Executors of 
Estate of William H. Talbot, Deceased (Docket No. 
20409) and Wells Fargo Bank & Union Trust Com- 
pany, Administrator with Will Annexed, Estate of 
Frederick C. Talbot, Deceased, (Docket No. 20411), 
Petitioners, and the Commissioner of Internal Reve- 
nue, Respondent, by their respective attorneys of 
record, do hereby stipulate that each of the above 
entitled matters shall be heard and determined by 
the United States Board of Tax Appeals above 
named, upon the following agreed statement of 
facts : 

FACTS CONCERNING AND COMMON TO 
DOCKETS NOS. 20407, 20409 and 20411: 

I. That, the Puget Mill Company is and was at 
all times herein mentioned a corporation duly or- 
ganized and existing under and by virtue of tlie laws 
of the State of California. 

II. That, said Puget Mill Company was duly in- 
corporated under the laws of the State of California 
prior to February 28, 1913 with an authorized capi- 
tal of $2,000,000.00, divided into 20,000 shares of 
common stock of a par value of $100.00 each. 

III. That, said 20,000 shares of the common 
capital stock of said Puget Mill Company consti- 
tuted the entire authorized capital stock of said 
Puget Mill Company and that said shares were out- 
standing on [20] February 28, 1913 and at all times 



26 Commr. of Intenial Rev. vs. 

subsequent thereto, to and including December 31, 
1920 and thereafter. 

IV. That, on March 1, 1913, the said Puget Mill 
Company had a surplus account of $19,535,614.79, 
which surplus account consisted of $2,183,090.53 
from earnings prior to March 1, 1913 and $17,352,- 
524.26 from appreciation in value of assets to their 
fair market value on March 1, 1913. 

V. That, subsequent to February 28, 1913 and 
prior to January 1, 1921, said Puget Mill Company 
sustained operating losses or made operating protits, 
based upon the appreciated March 1, 1913 value of 
its assets, as follows: 





1913 to 


Operating 
Losses 


Operating 
Profits 


March 1, 






December 31, 


1913 


$138,350.86 




Calendar 


Year 


1914 


276,464.44 








1915 


338,488.17 








1916 


279,943.04 








1917 


15,625.07 








1918 




294.347.16 






1919 




176,384.27 






1920 




370,880.06 



VI. That, subsequent to February 28, 1913, and 
prior to January 1, 1921, said Puget Mill Company 
realized appreciation, that had accrued prior to 
March 1, [21] 1913, through the sale or other dis- 
position Of its assets owned prior to March 1, 1913, 
as follows: 



Susan Talbot Richer et ah 



27 



March 1, 1913 to December 

31, 1913 
(Calendar Year 1914 
1915 



$ 



n 



1916 
1917 
1918 
1919 
1920 



Total 



48,546.61 

102,119.67 

78,632.56 

648,359.36 

1,049,608.97 

1,072,894.74 

1,287,664.78 

894,650.94 

5,182,477.63 



YII. That, subsequent to February 28, 1913 and 
prior to January 1, 1921, said Puget Mill Com- 
pany made distributions in cash to its stockholders 
as follows: 

March 1, 1913 to December 



31, 1913 








$150,000.00 


1914 








150,000.00 


1915 








150,000.00 


1917 








300,000.00 


August 


30, 


1918 


12,500.00 




September 


30, 


1918 


12,500.00 




October 


31, 


1918 


12,500.00 




November 


30, 


1918 


12,500.00 




December 


31, 


1918 


12,500.00 




Total 1918 




62,500.00 



28 



Commr. of Internal Ber. vs. 



February 


5, 


1919 


12,500.00 


February . 


27, 


1919 


12,500.00 


March 


21, 


1919 


12,500.00 


April 


30, 


1919 


12,500.00 


]\Iay 


27, 


1919 


12,500.00 


June 


30, 


1919 


12,500.00 


July 


31, 


1919 


12,500.00 


August 


30, 


1919 


12,500.00 


September 


30, 


1919 


12,500.00 


October 


31, 


1919 


12,500.00 


November 


28, 


1919 


12,500.00 


December 


30, 


1919 


512,500.00 


Total 1919 


650,000.00 








[22] 


January 


31, 


1920 


$25,000.00 


February 


26, 


1920 


25,000.00 


March 


29, 


1920 


25,000.00 


April 


30, 


1920 


25,000.00 


May 


25, 


1920 


25,000.00 


June 


25, 


1920 


25,000.00 


July 


29, 


1920 


25,000.00 


August 


30, 


1920 


25,000.00 


September 


29, 


1920 


25,000.00 


October 


28, 


1920 


25,000.00 


November 


30, 


1920 


25,000.00 


December 


30, 


1920 


25,000.00 


Total 1920 


300,000.00 



VIII. That, said Puget Mill (^ompany main- 
tained separate surplus accounts in its books show- 



Susan Talbot Richer et al. 



29 



ing (1) Surplus Earned Prior to March 1, 1913, 
(2) Appreciation Surplus Accrued to March 1, 
1913, (3) Realized Appreciation Surplus (termed 
Capital Asset Surplus in the accounts), and (4) 
Current Sui'plus or Deficit Account, in which the 
losses or profits subsequent to February 28, 1913 
were carried. The said distributions made between 
March 1, 1913 and December 31, 1917 have been 
charged to the respective surplus accounts as fol- 
lows : 



Total 
Distribution 



Charged to 
Surplus 
Earned 
Prior to 

Meh. 1-13 



Charged to 
Apprecia- 
tion 
Surplus 



Charged to 

Realized 

Appreciation 

Surplus 

(Capital 

Asset 

Surplus) 



March 1, 

1913 to 

December 31, 

1913 $150,000.00 
Calendar 

Year 

1914 
Calendar 

Year 

1915 
Calendar 

Year 

1917 300,000.00 



150,000.00 



150,000.00 70,701.16 



150,000.00 



150,000.00 

79,298.84 

300,000.00 



30 Commr. of Internal Rev. vs. 

of the said Puget Mill Company authorizing or 
declaring the said distributions to the stockholders 
between March 1, 1913 and December 31, 1920. in- 
clusive. 

FACTS CONCERNING PARTICULARLY THE 
APPEAL OF TALBOT C. WALKER, 
DOCKET NO. 20407: 

IX. That, at all times between January 1, 1917 
and December 31, 1920, inclusive, said Talbot (\ 
Walker, one of the foregoing petitioners, owned 
927 and 7/9ths shares of the total of 20,000 shares of 
the said common capital stock of said Puget Mill 
(^ompany issued and outstanding as aforesaid. 

X. That, said Talbot C. Walker received of said 
distributions in cash from said Puget Mill Com- 
pany on said 927 and 7/9ths shares of said stock, 
distributions as follows: 



1917 Total 






$ 13,916.64 


August 30, 


1918 


$ 579.86 




September 30, 


1918 


579.86 




October 31, 


1918 


579.86 




November 30, 


1918 


579.86 




December 31, 


1918 


579.86 




Total 1918 




2,899.30 








[24] 



Svsan Talhot Riclcer ef aJ. 



31 



February 5 
February 27 
March 



April 
May 
June 
July 
August 
September 30 
October 31 
November 28 
December 30 



21 
30 

27, 
30 
31 
30 



1919 
1919 
1919 
1919 
1919 
1919 
1919 
1919 
1919 
1919 
1919 
1919 



$ 



Total 1920 



579.86 
579.86 
579.86 
579.86 
579.86 
579.86 
579.86 
579.86 
579.86 
579.86 
579.86 
23,774.30 



Total 1919 






January 31, 


1920 


1,159.74 


February 26, 


1920 


1,159.74 


March 29, 


1920 


1,159.74 


April 30, 


1920 


1,159.74 


May 25, 


1920 


1,159.74 


June 25, 


1920 


1,159.74 


July 29, 


1920 


1,159.74 


August 30, 


1920 


1,159.74 


September 29, 


1920 


1,159.74 


October 28, 


1920 


1,159.74 


November 30, 


1920 


1,159.74 


December 30, 


1920 


1,159.74 



30,152.76 



13,916.88 



XI. That, in the determination of the deficiency 
against said Talbot C. Walker (Docket No. 20407) 



32 



Commr. of Infrrual I?er. vs. 



tor the years 1918, 1919 and 1920, the respondent 
inchided in taxable income of said Tall)ot C. Walker 
the following amonnts as representing taxable divi- 
dends from the said Pnget Mill Company for said 
years : 





Total 

Distribution 

Received 


Amount 

considered 

Taxable by 

Respondent 


Amount 
considered 
Non-taxable 

by 
Respondent 


Calendar 








Yr. 1938 


$ 2,899.30 


2,899.30 


None 


Calendar 








Yr. 1919 


30,152.76 


30,152.76 


None 


Calendar 








Yr. 1920 


13,916.88 


13,916.88 


None 
[25] 



XII. That, in the determination of the deficiency 
against said Talbot C. Walker (Docket No. 20407) 
for the year 1917 the respondent inclnded in taxable 
income of said Talbot C. Walker an amonnt of 
$5,992.51 as representing taxable dividends received 
frr)m said Pnget Mill Company, which amonnt of 
$5,992.51 res])ondent now concedes to represent non- 
taxable dividends and respondent likewise concedes 
that there is no deficiency as to said Talbot C. 
Walker for the said year of 1917. 

XIII. That, said Talbot C. Walker hereby con- 
cedes and abandons his Assignments of Error 4(b) 
and 4(c) in his petiticm, which assignments of error 
concerned the disallowance of a loss on the .sale of 



Susan Talhof RMer et al 33 

a dwelling- and expenses incurred in maintaining 
said dwelling. 

FACTS CONCERNING PARTICULARLY THE 
APPEAL OF SUSAN D. TALBOT, A. G. 
HARMS, WELLS FARGO BANK & UNION 
TRUST COMPANY, EXECUTRIX AND 
EXECUTORS OF ESTATE OF WILLIAM 
H. TALBOT, DECEASED (DOCKET NO. 
20409) : 

XIV. William H. Talbot died testate on Novem- 
ber 5, 1930 and Susan D. Talbot, A. G. Harms and 
Wells Fargo Bank & Union Trust Company were 
thereafter duly appointed as executrix and executors 
of his estate, thereupon duly qualitied as such and 
ever since the 28th day of November, 1930 have 
been [26] and now are the duly apj^ointed, qualified 
and acting executrix and executors of the last will 
of said deceased and said executrix and executors 
have been duly substituted as petitioners in this 
matter in lieu of said William H. Talbot. 

XV. That, at all times between January 1, 1919 
and December 31, 1919, inclusive, said William H. 
Talbot was the owner of 2,783 and 1/3 shares of the 
total of 20,000 shares of said Common capital stock 
of said Puget Mill Company issued and outstanding 
as aforesaid. 

XVI. That, said William H. Talbot received of 
said distributions in cash from said Puget Mill 
Company on said 2,783 and 1/3 shares of said stock, 
distributions as follows: 



34 



Commr. of Internal Be v. vs. 



Fe])riiary 


5, 


1919 


$ 1,739.57 


February 


27, 


1919 


1,739.57 


March 


21, 


1919 


1,739.57 


Aj^ril 


30, 


1919 


1,739.57 


May 


27, 


1919 


1,739.57 


June 


30, 


1919 


1,739.57 


July 


31, 


1919 


1,739.57 


August 


30, 


1919 


1,739.57 


Septembei 


•30, 


1919 


1,739.57 


October 


31, 


1919 


1,739.57 


November 28, 


1919 


1,739.57 


December 


30, 


1919 


71,322.90 


Total 191J 





90,458.17 



XVII. That, in the determination of the defi- 
ciency against said William H. Talbot, now de- 
ceased, and for whom there has been substituted as 
petitioners Susan D. [27] Talbot, A. G. Harms and 
Wells Fargo Bank & Union Trust Company, Exe- 
cutrix and Executors of the Estate of William H. 
Talbot, Deceased (Docket No. 20409), for the year 
1919 the respondent included in taxable dividend 
income of said William H. Talbot the entire amount 
of distributions received by him from the said Puget 
Mill Company in amount of $90,458.17. 

XVIII. That, said William H. Talbot duly filed 
his income tax return on the form specified by re- 
spondent for the calendar year 1919 with the Collec- 
tor of Internal Revenue at San Francisco, Cali- 
fornia, on or before March 15, 1920 and duly paid 



Susan Talbot Bicker et al. 35 

the tax thereon shown to be due in amount of $21,- 
754.42 within the time prescribed by law for the pay- 
ment thereof. 

XIX. That, without full compliance with the 
provisions of Section 250(d) of the Revenue Act of 
1921 respondent made an assessment of income taxes 
against said William H. Talbot for said year 1919 
in amount of $154,663.09 and said assessment was 
made on or about, but not later than, October 
18, 1923. 

XX. That, said William H. Talbot duly filed a 
proper claim in abatement against said assessment 
of $154,663.09 with the Collector of Internal Reve- 
nue [28] at San Francisco, California, which claim 
was duly accepted by said Collector of Internal 
Revenue at San Francisco, California, and which 
said claim is the same claim allowed in part and re- 
jected in part in the deficiency letter from which this 
appeal was taken. Said claim was pending and mi- 
disposed of in the office of the respondent at the time 
of the enactment of the Revenue Acts of 1924 and 
1926. 

XXI. That, neither said William H. Talbot nor 
the executors or executrix of his estate as aforesaid 
have ever given a bond to the Collector of Internal 
Revenue in connection with said assessment of $154,- 
663.09 and no part of said assessment has been paid 
except a credit of $45.15 applied to the account 
imder date of December 1, 1930. 

XXII. That, neither said William H. Talbot nor 
the executrix or executors of his estate as aforesaid 



36 Commr. of InterTtal Rev. vs. 

have ever entered into any consent or waiver extend- 
ing the statutory period for either assessment or 
collection of any income taxes for the year 1919 or 
of said assessment of $15-1:,663.09, other than may 
be deemed to result as a matter of law from the 
tiling of said abatement claim, the determination of 
the respondent as shown by the deficiency letter and 
the institution of this proceeding before the Board. 

[29] 

XXIII. That, no proceeding in Court or other- 
wise has ever been instituted by respondent to collect 
the outstanding portion of said assessment of $154,- 
663.09 or any part thereof other than the issuance 
of the sixty day letter from which this appeal was 
taken. 

FACTS CONCERNING PARTICULARLY THE 
APPEAL OF WELLS FARGO BANK & 
UNION TRUST COMPANY, ADMINIS- 
TRATOR WITH WILL ANNEXED, ES- 
TATE OF FREDERICK C. TALBOT, DE- 
CEASED (DOCKET NO. 20411): 

XXIV. Frederick C. Talbot died testate on 
March 10, 1919 and the aforesaid William H. Tal- 
bot, now deceased, was duly appointed and qualified 
as the executor of his estate and acted as such until 
the date of his death on November 5, 1930. 

XXA". That, subsequent to the death of said 
William H. Talbot on November 5, 1930 as aforesaid 
the Wells Fargo Bank & Union Trust Company was 
appointed as Administrators with the Will An- 
nexed of the Estate of said Frederick C. Talbot by 
the Superior Court of the State of California in 



Susan Talhot Bicker et dl. 37 

and for the County of Alameda, Probate No. 2o636, 
Department No. 4 and said Wells Fargo Bank and 
Union Trust Company, as Administrator with the 
Will Annexed, Estate of Frederick C. Talbot, De- 
ceased has been duly substituted as petitioner in lieu 
of said William H. Talbot as Executor of tlie Estate 
of Frederick C. Talbot. [30] 

XXVI. That, at the date of his death on March 
10, 1919 said Frederick C. Talbot was the owner of 
2,783 and 1/3 shares of the total of 20,000 shares of 
said common capital stock of said Puget Mill Com- 
IJany issued and outstanding as aforesaid and said 
2,783 and 1/3 shares were a part of the assets of the 
said estate of Frederick C. Talbot at all times be- 
tween the date of his death on March 10, 1919 and 
December 31, 1919, inclusive, and thereafter. 

XXVII. That, the said William H. Talbot as 
Executor of the Estate of said Frederick C. Talbot 
received of said distributions in cash from said 
Puget Mill Company on said 2,783 and 1/3 shares of 
said stock, distributions as follows: 



March 


21, 


1919 


$1,739.57 


April 


30, 


1919 


1,739.57 


May 


27, 


1919 


1,739.57 


June 


30, 


1919 


1,739.57 


July 


31, 


1919 


1,739.57 


August 


30, 


1919 


1,739.57 


September 30, 


1919 


1,739.57 


October 


31, 


1919 


1,739.57 


November 28, 


1919 


1,739.57 


December 


30, 


1919 


71,322.90 



Total 1919 86,979.03 



38 Commr. of Internal Rev. vs, 

XXVIII. That, in the determination of the defi- 
ciency against said William H. Talbot as Executor 
for the Estate of Frederick C. Talbot for whom 
there has been substituted as petitioner Wells Fargo 
Bank & Union Trust [31] Company, Administrator 
with Will Annexed, Estate of Frederick C. Talbot, 
Deceased, the respondent included in taxable divi- 
dend income for the said period of March 10, 1919 
to December 31, 1919 the entire amount of distribu- 
tions received by said William H. Talbot as execu- 
tor for said estate of said Frederick C. Talbot dur- 
ing said period from said Puget Mill Company in 
amount of $86,979.03. 

Counsel for Petitioners 

ANSON HERRICK, C.P.A. 
465 California Street, 
San Francisco, California 
HARTLEY F. PEART 

Hunter-Dulin Building, 
San Francisco, California 
FRED H. BROWN, C.P.A. 
465 California Street, 
San Francisco, California 
Counsel for Respondent 
C. M. CHAREST 
F.R.S. 
General Counsel, 
Bureau of Internal Revenue 
Oakland, California, 
June 23, 1931. [32] 



Snsan Talbot Riclxer et al. 39 

EXHIBIT A 

OFFICE OF PUGET MILL COMPANY 
San Francisco, California 
June 15, 1931 
Adopted October 23, 1913: 

"RESOLVED, That a Special Dividend, No. 
10, of $7.50 per share on the Capital Stock of 
this Company, be, and the same is hereby de- 
clared, payable out of the funds of the Company 
immediately. ' ' 
Adopted January 14, 1914: 

"RESOLVED, That Dividends Nos. 1, 2, 3, 
4, 5, 6, 7, 8, 9, 10, 11 and 12, of 621/2^ per share 
each on the Capital Stock of this Company, be, 
and the same are hereby declared, payable out 
of the funds of the Company from time to time 
as the same may be accumulated." 
Adopted January 28, 1915: 

"RESOLVED, That Dividends Nos. 13, 14, 
15, 16, 17, 18, 19, 20, 21, 22, 23 and 24, of 621/2^^ 
per share each on the Capital Stock of this Com- 
pany be, and same are hereby declared, payable 
out of the funds of the Company from time to 
time as the same may be accumulated." 
Adopted September 27, 1917 : 

"RESOLVED, That a distribution of $150,- 
000.00 from Capital asset Surplus, equivalent to 
$7.50 per share on the Capital Stock of this 
Company, be, and the same is hereby declared 
payable immediately." 



40 Commr. of Iniernal Bcr. vs. 

Adoi3ted December 31, 1917 : 

''RESOLVED, That a distribution of $150,- 
000.00 from Capital Asset Surplus, equivalent 
to $7.50 per share on the Capital Stock of this 
Company, be, and tlie same is hereby declared 
paya])le immediately." 

Adopted August 29, 1918: 

"RESOLVED, That a distribution of $12,- 
500.00, equivalent to 62i/2f per share on the 
capital stock of this Company, be, and the same 
is hereby declared, payable out of the funds of 
the Company immediately. ' ' [33] 

Adopted October 1, 1918: 

"RESOLVED, That the action of the officers 
of this Corporation in distributing $12,500.00, 
equiA^alent to 621/2^* p6r share on the Capital 
Stock of the Company, paid Sept. 30th, 1918, 
be, and the same is here])y ratified, approved 
and confirmed." 

Adopted October 1, 1918: 

"RESOLVED, That a distribution of $37,- 
500.00, equivalent to $1,871/2 per share on the 
Capital Stock of this Company, be, and the 
same is hereby declared, payal)le in three equal 
installments of $12,500.00 each, out of the funds 
of the Company, on Oct. 31st, Nov. 30tli and 
December 31st, 1918." 

Adopted February 13, 1919: 

"RESOLVED, That the action of the officers 
of tliis Corporation in distributing $12,500.00, 
equivalent to 62^?^ per share on the Capital 
Stock of the Company, paid Feb. 5th, 1919, be. 



Susan Talhot Richer et al. 41 

and the same is hereby ratified, approved and 
confirmed. ' ' 

Adopted February 13, 1919: 

"RESOLVED, That a distribution of $137,- 
500.00, equivalent to $6,871/^ per share on the 
Capital Stock of this Company, be, and the 
same is hereby declared, payable out of the 
funds of the Company as acciunulated." 

Adopted December 23, 1919: 

"RESOLVED, That a distribution of $500,- 
000.00, equivalent to $25.00 per share on the 
Capital Stock of this Comi^any, be, and the 
same is hereby declared, payable out of the 
funds of the Company on Dec. 31st, 1919." 

Adopted September 15, 1920 : 

"RESOLVED, That the action of the officers 
of this Corporation in distributing $200,000.00, 
equivalent to $10.00 per share on the Capital 
Stock of the Company, paid January 31st, Feb. 
26th, Mar. 29th, Apr. 30th, May 25th, June 28th, 
July 29th and Aug'. 30th, 1920, in equal install- 
ments, be, and the same is hereby ratified, ap- 
proved and confirmed." 

Adopted September 15, 1920 : 

"RESOLVED, That a distrilnition of $100,- 
000.00, equivalent to $5.00 per share on the 
Capital Stock of this Company, be, and the 
same is hereby declared, payable out of the 
funds of the Company on Sept. 30th, Oct. 30th, 
Nov. 30th and Dec. 31st, 1920, in equal install- 
ments of $25,000.00 each." [34] 



42 Commr. of Internal Rev. vs. 

I, JOHX W. KIXO, Secretary of Pui>et Mill 
Company, hereby certify that the above and fore- 
going are full, true and correct copies of resolu- 
tions duly passed at meetings of the Board of 
Directors of said Puget Mill Company held on 
the dates given above, at which meetings a qiu)rum 
was present and voted unanimously in favor of said 
resolutions. 

[Seal] JOHN W. KING 

Secretary 

[Endorsed] : United States Board of Tax Ap- 
peals. Filed at hearing June 23, 1931. [35] 



[Title of Court and Cause— Docket Nos. 20407, 
20409, 20411.] 

Promulgated February 28, 1933. 

1. Statute of limitations had tolled deficiency 
asseited at Docket No. 20409 when notice of de- 
ficiency was issued. 

2. Earnings and profits of a corporation accrued 
after March 1, 1913, must be com])ined with oper- 
ating losses sustained during the same period in 
order to determine the amount of earnings and 
profits accumulated aftei' March 1, 1913, which may 
be distributed to stockholders subject to surtaxes. 

Hartley Peart, Esq., Anson Heri-ick, C. P. A., 
and Fred H. Brown, C. P. A., for the petitioners. 
F. K. Shearer, Esq., for the respondent. 



Susan Talbot Bicker et ah 43 

OPINION. 

LANSDON: At Docket No. 20407 the respond- 
ent asserts deficiencies in income tax against peti- 
tioner Talbot C\ Walker for the years 1917, 1918, 
1919 and 1920, in the respective anionnts of $68.87, 
$30.97, $8,679.76 and $2,033.41. At Docket No. 
20409 the tax in controversy is $46,488.05, which is 
the unbated remainder of an original deficiency as- 
serted against W. H. Talbot for the year 1919, in 
the amount of $154,663.09. At Docket No. 20411, 
the tax in controversy is $22,402.98, which is the 
unabated remainder of an original deficiency as- 
serted against the estate of Frederick C. Talbot for 
the fiscal period March 10, 1919, to December 31, 
1919, in the amount of $28,499.28. Two issues are 
involved: (1) Whether certain distributions made 
to the several petitioners in the taxable years are 
taxable as profits accumulated after March 1, 1913, 
and (2) Whether the deficiency asserted against W. 
H. Talbot was barred by the statute of limitations 
at the date of the deficiency notice. The first issue 
is common to all the dockets. The three proceedings 
have been consolidated for hearing. 

After the issue of the deficiency notices, but prior 
to the hearing, William H. Talbot, executor of the 
estate of Frederick C. Talbot, died. He was suc- 
ceeded as such executor by the Wells Fargo Banlv 
& Union Trust Company, which, by motion duly 
made and granted, has been substituted for the ori- 
ginal petitioner at Docket No. 20411. In like man- 
ner Susan D. Talbot, A. G. Harms and the Wells 



44 Commr. of Internal Rev. vs. 

Fargo Bank & Union Trust Company, as executrix 
and executors of the estate of William H. Talbot, 
deceased, have been substituted for the original 
petitioner at Docket No. 20409. 

The parties have filed, and the Board adopts as 
its findings of fact, a stipulation ^Yhich covers all 
the facts pertinent to the issues of these proceedings 
and which we hereby incorporate in this report by 
reference. 

In the proceeding at Docket No. 20409, the peti- 
tioner pleads that the statute of limitations had 
run at the date of the deficiency notice. The parties 
agree as to the following facts in relation thereto. 
The income tax return of William H. Talbot, the 
petitioner's decedent, was filed on March 15, 1920; 
on October 18, 1923, the Commissioner made a non- 
compliance assessment of the deficiency in the 
amount of $154,663.09, as to which an abatement 
claim was duly filed and which was pending at the 
effective dates of the Revenue Acts of 1924 and 
1926; on August 26, 1926, the Commissioner mailed 
a letter to the petitioner in conformity with section 
283(e) of the Revenue Act of that year in whicli 
such claim was allowed for $108,175.04 and re- 
jected for $46,488.05 ; on October 5, the original pe- 
tition was filed with the Board of Tax Appeals. 
IVtitioner never signed any waiver extending the 
period for determining, assessing or collecting tlie 
inia])ated portion of the noncompliance assessment 
nor made any bond in relation to the tax liability 
in controversv. 



Susan Talbot Bicker et at. 45 

In support of his contention that the statute of 
limitations had run against his tax liability for 
1919, the petitioner relies upon Russell v. United 
States, 278 U. S. 181, and on numerous decisions 
of this Board in conformity therewith. In the Rus- 
sell case the court said : 

Section 277, as above shown, limits suits for 
taxes imposed by the Act of 1918 to five years 
after the return, except (§278) in certain cases 
where an assessment has been made. In the 
excepted cases the period for suit is ex- [37] 
tended to six years after the assessment. But 
§278 further provides that it shall not authorize 
the collection of a tax after the same has been 
actually barred by the applicable statute, and 
further that it shall not affect any assessment 
made prior to June 2, 1924. 

Unless extended by waivel^s or by operation of 
law the time in which the Commissioner could move 
for the collection of the deficiency here involved 
expired on March 15, 1925. There was no waiver, 
but counsel for the respondent argues at great 
length that "any assessment of tax for 1919, which 
is brought within the provisions of section 280 of the 
Revenue Act of 1924 by a final determination made 
after June 2, 1924, would be subject to the six year 
period of limitation for collection provided in the 
1924 and 1926 Acts". The infirmity of this argu- 
ment as to the facts of the present proceeding is 
so obvious that little discussion is required. If tlio 



46 Commr. of Infernal Rev. vs. 

noncompliance assessment of October 15, 1923, was 
not an assessment within the meaning of the hiw, 
it follows that no assessment or final determination 
was made prior to March 15, 1925, and that the 
denial of petitioner's claim for al)atement in part 
on August 26, 1926, was after the expiration of the 
statutory limitation provided in the Revenue Act 
of 1918. The plain fact here